Industrials

Initiating On U.S. Midstream

By: Jason Gabelman, David Deckelbaum, Aaron MacNeil

Jul. 31, 2025 - 2 minutes

An aerial view of a large liquefied natural gas carrier ship docked at a port with several large storage tanks on land and connected by pipes to the ship.

Overview:

New liquified natural gas (LNG) capacity and data centers may maintain growth in natural gas demand particularly in the U.S. gulf coast and southeast.
Midstream companies could benefit from growing in-basin natural gas services and existing national gas pipelines to support the demand.
The natural gas liquids (NGL) wellhead-to-water thematic has been a tailwind for several NGL companies.
Continued infrastructure growth combined with slowing volume growth presents headwinds.

The TD Cowen Insight

Natural gas demand growth remains firmly underpinned by LNG capacity expansion and data centers, requiring additional infrastructure beyond what is currently under construction. The NGL wellhead-to-water thematic tailwind is decelerating, which could result in an overpipe market.

Our Thesis

Midstream companies provide infrastructure to move hydrocarbons. In the past three years, midstream equities have benefited from two themes that have underpinned new projects, and by extension, earnings growth:

NGL value-chain integration from wellhead-to-water and
natural gas demand growth from LNG export capacity and data centers that has supported larger, more economic project backlog growth than the first theme. The latter should continue into the 2030s while the former could be impacted by slowing NGL production growth. These themes should offer consistent earnings and distribution growth compared to other energy companies with more volatile earnings.

Global LNG Supply/Demand (Cumulative MM tpa)

What is Proprietary?

Midstream dynamics are localized. As such, we break down the U.S. into 14 natural gas regions to analyze supply and demand accounting for LNG and data center demand, power mix and demand seasonality plus renewable intermittency. We analyze NGL supply and demand by petroleum region at each part of the value chain to assess points of shorts and longs.

Financial and Industry Model Implications

U.S. natural gas demand from LNG exports and data centers could support 20 billion cubic feet per day (bcf/d) growth through 2030 (20% increase). Natural gas supply growth could benefit those with large gathering and processing footprints. We see the entire NGL value chain with sufficient infrastructure accounting for projects under construction.

What to Watch

The Permian Basin has driven midstream growth the past decade; we expect basin growth to slow, which could impact growth prospects, particularly those with NGL leverage. The call on U.S. natural gas supply is large, though it is not completely clear where that supply will materialize. We are also monitoring the pace of southeast data centers.

Subscribing clients can read the full report, Initiating on US Midstream - Ahead Of The Curve, on the TD One Portal

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Jason Gabelman

Director, Sustainability & Energy Transition – Next Generation Fuels and Energy – Integrated Oil, Refining & Marketing, Liquefied Natural Gas (LNG) Research Analyst, TD Cowen

Jason Gabelman
Director, Sustainability & Energy Transition – Next Generation Fuels and Energy – Integrated Oil, Refining & Marketing, Liquefied Natural Gas (LNG) Research Analyst, TD Cowen

Biography

Jason Gabelman is a Director at TD Cowen, covering Sustainability & Energy Transition – Next Generation Fuels and Energy – Integrated Oil, Refining & Marketing, Liquefied Natural Gas (LNG) sectors. Mr. Gabelman joined TD Cowen in 2013 as a research associate for the refining & marketing team. He supported team growth into new coverage verticals such as integrated oil and LNG. Mr. Gabelman also spearheaded expansion of TD Cowen’s Energy & Materials Strategy product, marrying TD Cowen’s data science initiative with energy market analysis. He previously worked for BP’s U.S. Refining and Marketing segment, where he held a variety of commercial roles in finance, strategy, and refinery operations.

Mr. Gabelman earned a bachelor’s degree in business administration from the University of Michigan in 2010.

David Deckelbaum, CFA

Managing Director, Sustainability & Energy Transition – Next Generation Materials and Energy – Oil & Gas Exploration & Production Research Analyst, TD Cowen

David Deckelbaum, CFA
Managing Director, Sustainability & Energy Transition – Next Generation Materials and Energy – Oil & Gas Exploration & Production Research Analyst, TD Cowen

Biography

Mr. David Deckelbaum, CFA, is a Managing Director and senior analyst, Sustainability & Energy Transition – Next Generation Materials and Energy – Oil & Gas Exploration & Production. He joined TD Cowen in 2018 from Keybanc Capital Markets, where he led the firm’s energy research coverage. Prior to Keybanc, Mr. Deckelbaum worked on both the buy-side and sell-side at Millennium Partners, UBS and Bank of America following both E&P and oilfield service stocks.

Mr. Deckelbaum holds a BBA with concentrations in Finance and Information Systems from the George Washington University and is a CFA Charterholder.

Aaron MacNeil

Director, Equity Research, TD Cowen

Aaron MacNeil
Director, Equity Research, TD Cowen

Biography

Aaron leads equity research coverage of the Clean Technology and Energy Services sectors for TD Securities Inc., covering a number of small and mid-cap services companies in Canada. In 2019 and 2020, he received Refinitiv's Starmine Analyst award for the top earnings estimator in the Canadian Energy Equipment & Services space, and was ranked a 'Top Gun' analyst by Brendan Woods in 2021. Aaron joined TD in 2017 and was previously an Equity Research Analyst at AltaCorp Capital. Prior to that Aaron held various roles in operations, equity research and accounting at CanElson Drilling, Peters & Co., and KPMG. Aaron is a Chartered Professional Accountant and holds a Bachelor of Commerce from the University of Calgary.