Osaka Gas Bolsters US Gas Plant Push to Fuel AI Era Power Needs

Japan's Osaka Gas Co. is expanding its focus on US gas-fired power plant investments as artificial intelligence and data center construction drive surging demand for reliable energy supply. President Masataka Fujiwara highlighted a shortage of electricity in the

US due to the rapid growth of data centers, which is expected to account for nearly 10% of the country's power demand by 2035. Natural gas is projected to meet about 65% of this demand, according to BloombergNEF.

The company is prioritizing existing assets for now, as building new power plants is complicated by a global shortage of gas turbines. Fujiwara noted that population growth in the US will further increase energy demand, making natural gas a critical component of the energy mix. This strategy aligns with Osaka Gas's broader goal to expand its overseas energy operations as reported by Bloomberg.

Osaka Gas has already invested in several US gas-fired power plants and acquired Sabine Oil & Gas Corp. in 2019 to strengthen its position in American shale gas development. The company expects Sabine to produce 3.8 million tons of liquefied natural gas this fiscal year, with production gradually increasing as it rotates through assets in Texas. This move underscores its long-term commitment to securing energy resources in North America.

Strategic Expansion in Asia and Geopolitical Risk Management

Osaka Gas is also looking to diversify its investments in Asia, including India and Vietnam, both of which have revised energy policies to boost power generation capacity. In 2021, the company became the first Japanese firm to enter India's city gas distribution market through a consortium. While there is no set timeline, Osaka Gas aims to eventually sell liquefied natural gas to India. Vietnam is another area of interest, as the country seeks to expand both natural gas and renewable energy projects according to Bloomberg.

The company handled roughly 11 million tons of LNG in the year ended March 2025, with diversification and long-term contracts key to mitigating geopolitical risks. Currently, fuel from North America and Oceania form a large portion of its portfolio, and the company is exploring additional supply from Southeast Asia and the Middle East. In February, Osaka Gas signed a 15-year deal with Abu Dhabi National Oil Co. for LNG from the Ruwais Project in the UAE, further solidifying its global supply chain.

AI and Energy Infrastructure: A Growing Symbiosis

The surge in demand for reliable energy is closely tied to the development of AI and data centers. The global data center cooling market is expected to grow at a compound annual growth rate of 15.5% between 2025 and 2035, driven by increasing density of AI computing. This demand is expected to intensify as AI clusters and hyperscale data centers expand, generating higher heat loads that require advanced cooling solutions. Osaka Gas's investments in gas-fired power plants align with the need to support these energy-intensive operations as noted by Bloomberg.

In parallel, the US data center construction market is projected to grow to $28.95 billion by 2033, driven by the expansion of cloud computing, digital transformation, and the demand for scalable, energy-efficient infrastructure. Osaka Gas's strategy of acquiring and optimizing existing assets allows it to respond quickly to market needs without being hindered by delays in building new facilities according to Bloomberg. The company's long-term contracts and strategic partnerships position it to benefit from this growth while managing supply chain challenges as reported by Bloomberg.

Analyst Outlook and Market Reactions

Analysts remain cautiously optimistic about the future of natural gas investments, particularly in the US. Osaka Gas's expansion into the American market has been supported by favorable regulatory and economic conditions, including the Trump administration's push to boost domestic energy production. The company's recent deal with Abu Dhabi and its long-term contracts with US energy firms further reinforce its strategic positioning as reported by Bloomberg.

The company also expressed confidence in Japan's access to Russian LNG through the Sakhalin-2 project, with Fujiwara noting reassurance from Prime Minister Sanae Takaichi's discussions with President Trump regarding its importance to Japan's energy security according to Bloomberg. This highlights the complex interplay between global energy markets and geopolitical considerations, which Osaka Gas seeks to navigate through diversified supply chains and long-term partnerships as noted by Bloomberg.