Data centers are increasingly looking to gas to power ever larger facilities amid a grid capacity crunch.
AltaGas CEO Vern Yu said that the sector was in discussions with subsidiary Washington Gas about using the fossil fuel as a primary power source.
"The energy requirements for data centers are daunting and it's becoming increasingly obvious that all forms of energy will be needed to meet this demand and that natural gas will play a critical role," Yu said in an earnings call.
"Within Washington Gas, we're progressing multiple commercial discussions with data center developers we're working to provide natural gas as the primary energy source or have natural gas provide backup energy when there's insufficient power from the grid."
Yu said that the gas supply and engineering work was low risk because the data center developers were covering the upfront costs.
"Our current expectation is that capital for these projects will be regulated rate base investments," he said.
"But this rate base will likely have unique and accelerated rate structures. Data centers look to be part of our long-term growth opportunity and we're excited about adding new customers that would be among our largest users of natural gas."
AltaGas is also part of the consortium that backed the Mountain Valley Pipeline from West Virginia to Virginia, which began operation this June.
"The 2 billion cubic feet (Bcf) per day pipeline can be expanded with the partners currently evaluating the addition of another 475 million cubic feet per day of throughput via incremental compression," Yu said.
"We believe there will be strong demand for the expansion with recently proposed power plants requiring the full capacity of the project for projected data center demand."
An October report from S&P Global found that demand for natural gas to support data centers could reach three to six billion cubic feet per day as the industry struggles to find power for an AI buildout.
While natural gas has lower emissions than coal or oil, it is more than ten times the emissions of solar, and 40 times the emissions of wind or nuclear.
Environmental group the Sierra Club claims that the Mountain Valley Pipeline will become the single largest source of greenhouse gases in Virginia, producing annual emissions of over 89 million metric tons of carbon dioxide equivalent. The construction of the 480km pipeline has also damaged local environments.
Earlier this week DCD reported on an enormous campus of more than 70 data center buildings, together with a natural gas power plant, proposed for Pittsylvania County in Virginia. This could potentially connect to the Mountain Valley Pipeline.
