The Daley Note

The industry is engaged in a debate over how much gas demand will ultimately materialize for data centers. Rapid-fire project announcements suggest robust growth ahead. For capital markets, the more relevant question is how many data centers will actually be delivered, powered and placed into service, with the gap reflecting infrastructure constraints.

Using East Daley Analytics’ Data Center Demand Monitor tool in Energy Data Studio, our risk-adjusted forecast points to roughly 10 Bcf/d of natural gas demand by 2030 tied to data center development. We tier developers by quality, discount speculative sponsors, apply haircuts to utilization, and phase construction timelines to arrive at this forecast. It’s not a headline figure, but a more realistic estimate of the projects likely to advance.

Now compare that demand forecast to planned infrastructure. Using Energy Data Studio, we map announced transmission, compression and generation expansions, and see closer to ~5 Bcf/d of credible infrastructure positioned to serve data center load over the same time horizon. That leaves an infrastructure gap of ~5 Bcf/d.

This gap is the story. It suggests that many announced data centers will not start on schedule. Some will start in phased tranches. Others will wait for generation, pipeline laterals, or compression to be built. In constrained systems, molecules and megawatts must arrive together. When they don’t, capital is rationed. And rationing creates pricing power.

This gap is where Williams (WMB) is positioning itself as a central actor. WMB is not simply transporting gas; it is integrating supply, transmission and power generation into a coordinated offering.

East Daley’s Financial Blueprint model for WMB finds the company currently has over $7B of projects tied to the data center theme, shown in the map above. One of the largest is Project Socrates, a $2.2B project combining gas delivery with 400 MW of power generation for a Meta data center in New Albany, OH.

Williams’ data center investments translate into meaningful earnings leverage: Our model shows ~$1.2B of annual EBITDA uplift by YE27, expanding to ~$1.8B by YE28 on an annual run rate.

That step-up matters. It demonstrates that the bottleneck is real and already being monetized. WMB’s pipeline footprint gives it an edge. The company can move supply from major basins, connect into constrained demand corridors and layer on generation solutions.

Integration becomes a competitive advantage in a market with synchronization risk. Projects fail if fuel supply and power generation and other infrastructure don’t align. The ability to deliver a bundled solution reduces execution risk for hyperscalers and increases visibility for investors.

The opportunity lies in last-mile pipeline development and targeted infrastructure builds. Laterals, compression upgrades and metering facilities may not grab headlines, but they unlock volumes. These projects are typically smaller in capital intensity, faster to permit, and capable of generating durable, contracted cash flows when paired with creditworthy demand.

The 10 Bcf/d data center demand wave will not clear evenly, which is why it’s investable. Scarcity shifts the economics toward assets that relieve constraints, like WMB’s investments. Projects that can deliver reliability, whether firm transport, generation fuel or electricity supply, will command premium returns. – Jaxson Fryer Tickers: META, WMB.