Natural gas prices could triple in some parts of the United States in the coming years, according to a new research report from energy firm Noreva. This potential increase is attributed to rising demand from hyperscalers for their AI data centres, coupled with declining supply growth and increased exports of liquefied natural gas.
Hyperscalers, including Amazon, Google, Meta, and Microsoft, have recently committed to building gigawatt-scale natural gas power plants to power their AI ambitions. For instance, Meta announced plans in March for a 7.5-gigawatt plant in Louisiana, while Microsoft, Google, and Amazon also plan large gas power plants in Texas.
Noreva expects prices to soar above $10 per million BTUs in certain hubs, compared to current prices ranging from approximately $2 to $4.50 per million BTUs. Peter Gardett, CEO of Noreva, stated that the market is heading towards a much tighter gas supply than in previous years.
A doubling or tripling of natural gas prices could significantly increase the running costs for AI data centres that generate their own power. This could lead to higher token costs or push hyperscalers to connect to the grid, potentially driving up electricity prices.