AI-driven data center growth spurs expansion of natural gas infrastructure and midstream energy ETFs

The rapid buildout of artificial intelligence-related data centers is increasingly driving demand for dedicated natural gas power generation in the United States, creating long-term contracting opportunities for energy infrastructure companies and potential tailwinds for midstream-focused exchange-traded funds.

Massive data center projects expand behind-the-meter natural gas demand

SoftBank Group is developing a 9.2-gigawatt (GW) data center project in Piketon, Ohio, supported by a $33 billion dedicated natural gas power plant. Kinder Morgan (KMI) was named as the sole midstream company in the consortium developing the project, positioning KMI to use its existing pipeline footprint in Ohio to supply the facility’s natural gas needs.

The Ohio initiative is part of a broader $550 billion U.S.-Japan strategic investment initiative. The same initiative is also linked to a major expansion in Texas, where NextEra Energy (NEE) has secured land for a 5.2 GW natural gas power hub intended to support the Electric Reliability Council of Texas (ERCOT) market, leveraging East Texas’s gas supply.

In Louisiana, Entergy Louisiana is building seven new gas-fueled plants totaling over 5.2 GW of capacity to support a Richland Parish data center hub for Meta. Energy Transfer (ET) has a 20-year agreement with Entergy Louisiana to supply natural gas to the facility.

Cause to development: grid constraints push generation closer to users

The projects reflect a shift toward “behind-the-meter” generation as utility grids struggle to keep pace with rising AI power requirements. For the midstream sector, the move toward dedicated gas-fired generation is already translating into long-term contracts and the need for new lateral pipeline builds to connect established infrastructure to new demand centers.

ETF implications and portfolio positioning

The Alerian Energy Infrastructure ETF (ENFR) is presented as positioned to capture this demand because it provides targeted exposure to companies building natural gas infrastructure. ENFR tracks the Alerian Midstream Energy Select Index (AMEI), which allocates nearly 70% of total weighting to natural gas infrastructure. The AMEI also lists an indicated yield of 4.7% as of April 9, combining an income component with the broader infrastructure growth theme tied to AI data centers.

Related energy sector support: nuclear funding alongside gas buildout

In addition to natural gas, the U.S.-Japan trade deal referenced in the article includes funding for GE Vernova Hitachi to develop small modular reactors (SMRs) in Tennessee and Alabama. The article frames this as a potential catalyst for nuclear-focused exchange-traded funds by offering a zero-carbon power alternative to complement the gas-heavy data center surge.