How LNG and power are shaping US gas pipeline development

Between 2010 and 2025, the size of the US gas market almost doubled, while prices almost halved. Upstream technology advancements have certainly played a key role, but the unsung hero in increasing supply and keeping prices stable has been the sustained development of pipelines to connect low-cost resources to markets. 

We recently published an in-depth insight into how in the US midstream gas sector, highlighting that demand pull from end users in the LNG and power sectors is supporting new gas pipeline development, which is an evolution from the model where the  supply push from producers underpins midstream investment. Complete the form to download the full report, or read on for a brief overview. 

The evolving landscape for US natural gas pipeline development 

While the US midstream gas sector has achieved significant growth over the past 15 years, pipeline projects have often faced both increased judicial and regulatory scrutiny and issues in obtaining a ‘social licence to operate’. In some cases, this has led to pipeline capacity constraints that have adversely affected upstream investment and regional price stability. 

Fortunately, permitting reform and other supportive policy measures look set make the situation easier and unlock future pipeline buildout; our Lens Gas & LNG platform is currently tracking US$50 billion worth of projects that would add up to 8,800 miles of new pipeline in the US.     

End users are stepping up to fund pipeline projects 

Historically, natural gas producers have committed to long-term firm transportation (FT) agreements with midstream operators on new gas pipelines. Upstream players wanted to access more profitable markets or ensure an outlet for their production, and “producer push” model was exacerbated by challenges facing utilities regarding federal and state decarbonisation targets.  

In a cyclical market, however, some upstream companies would prefer to avoid long-term midstream exposure, while midstream developers have had concerns about the creditworthiness of producers. Fortunately, as the role of gas in the future US energy mix improves, new end users have emerged that are motivated to secure long-term, low-cost, year-round supply by funding pipeline projects. 

US Gulf Coast LNG exports are shaping midstream development further afield 

As we noted in a recent edition of The Edge, the world needs more LNG to meet soaring demand — and the US is best placed to provide it. Having already surged to over 16 bcfd since 2015, we forecast US LNG exports to eventually make up nearly 40% of global supply. 

Most first-wave US LNG projects developed or repurposed existing header pipelines to pull gas from a myriad of Gulf Coast pipelines. But as competition for supply increases, LNG developers are funding pipeline projects to extend their supply chain further upstream.  

Rapid load growth and slowing renewable investment is boosting gas-fired power generation 

As we highlighted in a recent article, we expect soaring electricity demand and headwinds for renewables to help drive significant growth in US power sector gas demand by 2040. Load growth will be dominated by data centres, which are being built at pace and at scale to meet the massive data management requirements of generative AI. 

We are starting to see power end users taking pivotal roles in supporting pipeline development. 

Unleashing more US midstream gas projects will have impacts across the value chain 

The steady flow of funding for new pipeline projects will affect a wide range of stakeholders across the energy value chain, including many who may not think they have direct exposure to the gas market: 

Gas producers may need to fund fewer projects, so their capital spending can be more efficient and focused where most needed — such as in supply-constrained Permian and Northeast basins. 

Midstream developers will be extremely busy with new opportunities, but high demand may introduce new risks. 

LNG developers are recognising the importance of partnering with midstream developers to understand regional market dynamics — including competing demand, new takeaway projects, and long-term supply availability. 

Power producers and utilities are considering funding pipeline projects to enhance supply diversity and long-term security as they seek to meet rapidly growing demand from data centres, large industrial loads, and even conventional rate-payers. 

Data centre and large-load projects should pay close attention to gas prices, given their close correlation with power prices in regional power markets; at the same time, new pipeline capacity could unlock behind-the-meter generation to achieve speed to market. 

Don’t forget to fill out the form at the top of the page to download the full report, which explores this topic in detail and includes a range of supporting charts and data, along with analysis of key pipeline projects.  

You may also want to learn more about our Lens Gas & LNG and Lens Power & Renewables products, which deliver uniquely integrated, comprehensive insights across gas, power, and broader energy markets.