Time for Upstream to Rethink Midstream?
Capturing value for data center power demand
๐ช๐ต๐ผ ๐ฐ๐ฎ๐ฝ๐๐๐ฟ๐ฒ๐ ๐๐ต๐ฒ ๐ฒ๐ฐ๐ผ๐ป๐ผ๐บ๐ถ๐ฐ๐ ๐ณ๐ฟ๐ผ๐บ ๐๐๐ฟ๐ด๐ถ๐ป๐ด ๐ฑ๐ฎ๐๐ฎ ๐ฐ๐ฒ๐ป๐๐ฒ๐ฟ ๐ฝ๐ผ๐๐ฒ๐ฟ ๐ฑ๐ฒ๐บ๐ฎ๐ป๐ฑ? ๐๐ป๐ฑ ๐๐ต๐ผ๐๐น๐ฑ ๐๐ฝ๐๐๐ฟ๐ฒ๐ฎ๐บ ๐ด๐ฒ๐ ๐ฏ๐ฎ๐ฐ๐ธ ๐ถ๐ป๐๐ผ ๐๐ต๐ฒ ๐บ๐ถ๐ฑ๐๐๐ฟ๐ฒ๐ฎ๐บ ๐ด๐ฎ๐บ๐ฒ ๐๐ผ ๐ฝ๐น๐ฎ๐ ๐ฎ ๐ฏ๐ถ๐ด๐ด๐ฒ๐ฟ ๐ฟ๐ผ๐น๐ฒ?
Power producers are clearly benefitingโthrough long-term PPAs and ownership of assets that deliver the reliability hyperscale facilities demand.
That ๐ฟ๐ฒ๐น๐ถ๐ฎ๐ฏ๐ถ๐น๐ถ๐๐ ๐ถ๐ ๐ถ๐ป๐ฐ๐ฟ๐ฒ๐ฎ๐๐ถ๐ป๐ด๐น๐ ๐ฏ๐ฒ๐ถ๐ป๐ด ๐ฑ๐ฒ๐น๐ถ๐๐ฒ๐ฟ๐ฒ๐ฑ ๐ฏ๐ ๐ด๐ฎ๐-๐ณ๐ถ๐ฟ๐ฒ๐ฑ ๐ด๐ฒ๐ป๐ฒ๐ฟ๐ฎ๐๐ถ๐ผ๐ป. Interest in these assets is rising fast (good luck getting a turbine from GE Vernova right now).
But ๐ฎ ๐ฝ๐ผ๐๐ฒ๐ฟ ๐ฝ๐น๐ฎ๐ป๐ ๐ถ๐ ๐ผ๐ป๐น๐ ๐ฎ๐ ๐ฟ๐ฒ๐น๐ถ๐ฎ๐ฏ๐น๐ฒ ๐ฎ๐ ๐๐ต๐ฒ ๐ด๐ฎ๐ ๐๐๐ฝ๐ฝ๐น๐ ๐ณ๐ฒ๐ฒ๐ฑ๐ถ๐ป๐ด ๐ถ๐. And gas supply has generally proven more dependable than power supplyโjust ask pipeline operators who've weighed electrifying their own infrastructure.
๐ฆ๐ผ ๐๐ต๐ผ ๐ฒ๐ป๐๐๐ฟ๐ฒ๐ ๐๐ต๐ฎ๐ ๐ฟ๐ฒ๐น๐ถ๐ฎ๐ฏ๐ถ๐น๐ถ๐๐?
At one end, ๐ถ๐'๐ ๐๐ต๐ฒ ๐ฝ๐ฟ๐ผ๐ฑ๐๐ฐ๐ฒ๐ฟ, ๐ฏ๐ฎ๐ฐ๐ธ๐ฒ๐ฑ ๐ฏ๐ ๐ฑ๐ฟ๐ถ๐น๐น๐ถ๐ป๐ด ๐ถ๐ป๐๐ฒ๐ป๐๐ผ๐ฟ๐ (๐๐ต๐ฒ ๐พ๐๐ฎ๐น๐ถ๐๐ ๐ผ๐ณ ๐๐ต๐ถ๐ฐ๐ต ๐๐ฎ๐ฟ๐ถ๐ฒ๐ ๐๐ถ๐ฑ๐ฒ๐น๐).
In between sits ๐๐ต๐ฒ ๐บ๐ถ๐ฑ๐๐๐ฟ๐ฒ๐ฎ๐บ ๐ผ๐ฝ๐ฒ๐ฟ๐ฎ๐๐ผ๐ฟ, ๐ฎ๐ด๐ด๐ฟ๐ฒ๐ด๐ฎ๐๐ถ๐ป๐ด ๐ฎ๐ป๐ฑ ๐ฑ๐ฒ๐น๐ถ๐๐ฒ๐ฟ๐ถ๐ป๐ด ๐๐๐ฝ๐ฝ๐น๐. And right now, ๐๐ต๐ฒ๐ ๐๐ฒ๐ฒ๐บ ๐๐ผ ๐ฏ๐ฒ ๐ฐ๐ฎ๐ฝ๐๐๐ฟ๐ถ๐ป๐ด ๐ฎ ๐ฑ๐ถ๐๐ฝ๐ฟ๐ผ๐ฝ๐ผ๐ฟ๐๐ถ๐ผ๐ป๐ฎ๐๐ฒ ๐๐ต๐ฎ๐ฟ๐ฒ ๐ผ๐ณ ๐๐ต๐ฒ ๐๐ฎ๐น๐๐ฒโsee recent deals from Energy Transfer, Williams, and even integrated plays like Exxon and Chevron stepping in with solutions.
All of this raises important questions:
๐พ๐๐ฃ ๐ช๐ฅ๐จ๐ฉ๐ง๐๐๐ข ๐ฅ๐ง๐ค๐๐ช๐๐๐ง๐จ ๐ง๐๐๐ก๐ก๐ฎ ๐ฅ๐๐ง๐ฉ๐๐๐๐ฅ๐๐ฉ๐ ๐๐ฃ ๐ฉ๐๐๐จ ๐ฃ๐๐ฌ ๐ฌ๐๐ซ๐ ๐ค๐ ๐๐๐ข๐๐ฃ๐ ๐ฌ๐๐ฉ๐๐ค๐ช๐ฉ ๐๐ค๐ฃ๐ฉ๐ง๐ค๐ก๐ก๐๐ฃ๐ ๐ฉ๐๐ ๐๐ฃ๐๐ง๐๐จ๐ฉ๐ง๐ช๐๐ฉ๐ช๐ง๐ ๐ฉ๐๐๐ฉ ๐๐๐ฉ๐จ ๐๐๐จ ๐ฉ๐ค ๐ฉ๐๐ ๐ฅ๐ก๐๐ฃ๐ฉ ๐๐๐ฉ๐?
๐๐ ๐ฎ๐๐จ, ๐ฌ๐๐๐ฉ ๐๐ค๐๐จ ๐ฉ๐๐๐ฉ ๐ก๐ค๐ค๐ ๐ก๐๐ ๐?
๐๐ ๐ฃ๐ค, ๐๐จ ๐ฃ๐ค๐ฌ ๐ฉ๐๐ ๐ฉ๐๐ข๐ ๐ฉ๐ค ๐ง๐๐ซ๐๐จ๐๐ฉ ๐ข๐๐๐จ๐ฉ๐ง๐๐๐ข ๐ค๐ฌ๐ฃ๐๐ง๐จ๐๐๐ฅ?
