Here Comes the Hotstepper – Natural Gas Needs Set to Multiply, Power Demand Is a Case in Point

Companies Mentioned: Kinder Morgan, GE Vernova, ExxonMobil, Olin, Dow, Macquarie, Chevron, BP, Sunoco, ADNOC, ORLEN, Shandong Yuloing, CNOOC Shell, LyondellBasell, Chevron Phillips Chemical, Westlake, Shin-Etsu, Huntsman, Pactiv Evergreen, Novolex, Amcor, Berry Global, GMS Inc., Celanese, Reliance Industries Ltd, Rosneft, Gazprom, Electric Hydrogen, Siemens Energy, Total Hydrogen Systems, Renault, Plug Power, TECO 2030, Utility Global, AZEK Company, Northvolt
Commodities Mentioned: Natural Gas, Ethylene, Polyethylene (PE), Polyvinyl Chloride (PVC), Caustic Soda, Chlor-Alkali, Propylene Oxide, Electrolyzers, Hydrogen, Methanol, Acetic Acid, Lithium, Styrene, C4 Fractions, Ethylene Oxide, Glycols, Polyamide, Crude Oil, LNG, Monomers, Recycled Materials

As recognition grows that surging US (and global) power demand will be a challenge to supply fully, we think appreciation will also further rise for the need for high-capacity-factor power generation to fill the gap.
Natural gas consumed in US power generation hit a record in 2023 and is set to exceed this record in 2024. We think its demand will likely increase through 2030 alongside rising blue-based chemical/industrial use.
We look at Kinder Morgan’s natural gas demand outlook through 2030, positive views of gas power demand from GE Vernova, ExxonMobil’s potential to enter the power market, and industry shifts supporting our views.
We flag takeaways from Olin’s investor day event and evaluation of upgrading its EDC values globally and strategic ventures to PVC, as well as our view of its difficulties in keeping its Chlor-alkali assets fully utilized.
Otherwise, we look at management changes at Celanese after a rough couple of months, an ethylene project cancellation in Europe – mid-construction, and how polyethylene prices are sliding into year-end.

Exhibit 1: US demand for natural gas for power generation is trending higher – unlikely to reverse course anytime soon.