Kinder Morgan (KMI) is asking utilities in the Southeast to commit to at least 1 Bcf/d apiece on Southeast Connector (SEC), a new Tennessee supply line proposed into the Southern Natural Gas (SNG) system. A block of capacity that size roughly matches all the data center gas demand that East Daley Analytics expects to emerge across the six states SEC would serve. Utilities that sign up are betting on more than data centers.
SNG, a 50/50 joint venture of KMI and Southern Company (SO), closed a binding open season for SEC on Oct. 7. KMI announced a final investment decision on the SNG project last Wednesday (Oct. 21) in its 3Q26 earnings update, sized initially at 2.6 Bcf/d.
The 470-mile line would carry Appalachian gas from Tennessee Gas Pipeline, Columbia Gulf and Texas Eastern Transmission into SNG as early as Nov. 1, 2030 (see project map below). It adds a north-south path to KMI’s South System Expansion 4 and Mississippi Crossing projects, which will move gas east out of Mississippi.
Likely Data Center Load Fits in One ‘Cornerstone’ Block
In the open season announcement, SNG gave potential customers the option to sign up as ‘Cornerstone,’ ‘Foundation’ or ‘Anchor’ shippers, to receive varied service benefits. A top-tier Cornerstone shipper would commit to at least 1 Bcf/d of capacity for a minimum of 15 years.
In Energy Data Studio, East Daley tracks 42.5 GW of announced data center load in SEC’s footprint, enough to burn ~6.8 Bcf/d if natural gas powered all the facilities. Weighted for each project’s odds, we expect ~0.75 Bcf/d of demand to materialize. Georgia carries 31.1 GW of the load but only ~0.4 Bcf/d of risk-weighted demand. Just 7.4 GW starts service after SEC’s November 2030 target.
KMI’s own numbers show why utility queues overstate the opportunity. CFO David Michels said Southeast utilities hold more than 50 GW of advanced-stage large-load requests, worth ~8 Bcf/d of new demand if gas served it all. That matches East Daley’s national base case for data center demand growth through 2031.
Peak Demand and Displaced Coal Size the Pipe
Southern, which owns half of SNG, is a logical Cornerstone shipper. Its utilities have signed ~17 GW of large-load agreements, led by a 3.2 GW OpenAI campus near Savannah, GA. Yet power plants in the six states burned 8.5 Bcf/d in 2025, up just 0.3 Bcf/d from 2020 (see table at right).
Utilities sign firm capacity for peak days, not average load. SO’s utilities burned 3.7 Bcf/d in the peak 2025 month vs a 2.7 Bcf/d average. The Energy Information Administration (EIA) also lists 9.4 GW of regional coal capacity that is set to retire by 2034. The Tennessee Valley Authority (TVA) owns 5.6 GW of the coal capacity, including the Cumberland and Gallatin plants in the middle of Tennessee, the region where SEC would cross. That makes TVA the other natural backer for the SEC expansion.
Bottom Line: One Cornerstone shipper would roughly match all the gas demand that East Daley expects from data centers across SEC’s footprint. Every block beyond that is a bet on peak coverage, coal replacement and load nobody has announced yet. – Jaxson Fryer Tickers: KMI, SO.
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How Will Data Centers Affect Development in the Permian Basin?
Data centers are adding significant, non-intermittent demand for natural gas. What could that mean for Permian production and infrastructure?
Join East Daley on Oct. 28 at 10 am MT for a look at how growing gas demand could reshape the region’s natural gas, crude oil and NGL markets.
We’ll cover:
- Natural gas: Permian demand is growing from Gulf Coast pipeline expansions and gas-fired power generation supporting data centers. The basin could very become short gas – a strange paradox for a basin that has been notoriously constrained in the past.
- Crude: As gas demand and egress capacity grow, producers could shift toward gassier windows in the Delaware and Midland basins, producing more associated gas alongside lower oil volumes. We’ll consider how that could ease crude egress pressure, and how much new oil pipeline capacity might be needed beyond potential brownfield expansions.
- NGLs: Higher Waha prices could encourage more ethane rejection, while new very large ethane carriers (VLECs) are expected to be built over the next several years. We’ll explore the tug-of-war between rejection at the wellhead and growing demand at the dock — and what it could mean for ethane production.
Register now before spots fill up to hear East Daley’s analysis of the infrastructure and production shifts shaping the Permian.
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