BofA sees Appalachia gas output rising on pipeline, demand growth

Investing.com - Bank of America forecasts Appalachia natural gas production could grow by 6.75 billion cubic feet per day by 2030 as new pipeline capacity and local demand expansion ease current constraints that have capped output at roughly 34 billion cubic feet per day.

Local demand within the Appalachia region, defined as Ohio, Pennsylvania and West Virginia, is expected to grow at 0.6 billion cubic feet per day annually through 2030, adding 3.1 billion cubic feet per day total from 2025 to 2030. The growth is driven by datacenter expansion, both behind-the-meter and utility-fed, compared to historical growth of 0.3 billion cubic feet per day annually over the past decade primarily from power demand.

Pipelines currently under construction will unlock 1.6 billion cubic feet per day of additional capacity when the SESE pipeline comes online in the third quarter of 2027, with full utilization expected when MVP Boost adds 600 million cubic feet per day of capacity in 2028. The MVP pipeline, which came online in 2014 with 2 billion cubic feet per day capacity, only enabled 1 billion cubic feet per day of additional egress due to downstream constraints.

Projects without final investment decisions could add more than 4 billion cubic feet per day, though Bank of America assigns 50% probability to these developments, expecting 1.9 billion cubic feet per day by 2030. In the Northeast, Millennium PRO or Constitution pipelines could add 1.15 billion cubic feet per day, while Midwest projects including Boardwalk Borealis and TGP Line 219 could contribute 2.5 billion cubic feet per day through expansions of existing systems.

Bank of America favors gas midstream companies as the preferred way to gain exposure to the buildout, which the firm expects to extend into the next decade.

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