Executive Summary:
Infrastructure: EQT reached a deal to supply gas for a massive new data center project in western Pennsylvania.
Rigs: The US rig count was steady at 525 for the July 12 week.
Flows: US natural gas volumes averaged 70.6 Bcf/d in pipeline samples for the week ending July 20, up 1.1% W-o-W.
Storage: Traders expect the EIA to report a 29 Bcf injection for the week ending July 17.
Infrastructure:
Leading Northeast producer EQT reached a deal to supply gas to a converted coal plant in western Pennsylvania in support of a massive new data center project.
The Frontier Group of Companies announced July 15 it will construct a gas-fired power plant, the Shippingport Power Station, on the shores of the Ohio River. The new plant will be located at the site of the former 2.7 GW Bruce Mansfield plant, a coal-fired plant that was retired in 2019.
The Shippingport plant will use ~800 MMcf/d of gas produced by EQT to generate power. The gas will be supplied from the Marcellus and Utica shales, where EQT already produces over 6.5 Bcf/d of residue gas. Depending on the exact specs of the power plant, 800 MMcf/d could generate between 3-5 GW of electricity.
Frontier has partnered with a developer to build an on-site data center that will receive most of the power, and expects to supply over 1 GW of excess generation into the PJM power market. With that much capacity, the collocated data center would likely receive over 2 GW of power, easily making it the largest announced data center project East Daley is tracking in Pennsylvania (see state map from the Data Center Demand Monitor). The project continues a growing trend of in-basin collocation of data centers as developers search for new ways to ensure a guaranteed power supply.
National Fuel Gas Supply (NFG) will transport a significant share of the gas supply to the new power plant. NFG CEO David Bauer said the new transportation capacity will come online as early as fall 2026. Frontier didn’t disclose when the Shippingport Power Station would enter service or who would supply the turbines, but many large power plant manufactures have already announced multiyear queues for new projects due to soaring demand from data center developers.
Rigs:
The US rig count was unchanged for the July 12 week, standing at 525. The ArkLaTex and Barnett each gained 1 rig while the Eagle Ford (-1) and Permian (-3) lost rigs. Other basins remained flat W-o-W.
See East Daley’s weekly Rig Activity Tracker for more information on rigs by basin and company.
Flows:
US natural gas volumes averaged 70.7 Bcf/d in pipeline samples for the week ending July 20, up 1.1% W-o-W from 69.9 Bcf/d the previous week. Gas basins gained 0.7% W-o-W to average 44.1 Bcf/d. The Haynesville sample gained 1.8% to 11 Bcf/d. The Marcellus+Utica gained 0.2% to 32.2 Bcf/d. The Eagle Ford sample rose 4.6% to 1.66 Bcf/d.
Storage:
Traders and analysts expect the Energy Information Administration (EIA) to report a 29 Bcf injection for the week ending July 17. A 29 Bcf injection would decrease the surplus to the five-year average by 1 Bcf to 177 Bcf. The storage deficit to last year would decrease by 9 Bcf to 147 Bcf.
The next two storage reports will make or break summer 2025 from a demand perspective. Late July and early August is when seasonal temperatures normally peak and power burn is the strongest, resulting in the lowest injections (or in rare instances, withdrawals) of the summer.
According to X Weather (formerly Maxar), this July will rank as the eighth-hottest July on record since 1950 as measured by power-weighted cooling degree days (PWCDDs). PWCDDs for the Lower 48 are below last July but remain above the 10-year average. PWCDDs are tracking in a similar range to July 2023.
This summer has featured much greater renewables penetration in certain regions of the country, which is pressuring total gas-fired power burn and allowing more gas to be injected into storage. To the extent this situation holds through the end of the month and the first week of August, it will determine whether the injection season is robust versus last year. See East Daley Analytics’ latest Macro Supply & Demand Report for more analysis on the storage outlook.
Calendar:
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