Natural Gas Strengthens Midstream Outlook as Sector Shows Resilience Into 2025
Natural gas production growth, stable contract structures and long-term LNG trends continue to reinforce midstream resilience heading into 2025, despite broader market volatility and crude-driven uncertainty.
(P&GJ) — A recent outlook from Global X finds that natural gas continues to anchor midstream resilience heading into 2025, even as crude-exposed sectors struggle with volatility and weak margins. The report, released June 2025, shows that gas-focused upstream production and stronger natural gas pricing supported steadier performance across midstream storage and transportation during the first quarter.
According to Global X, “North American midstream should benefit from structural growth trends in 2025,” including higher natural gas output and expanded NGL and LNG processing capacity. U.S. dry gas production is forecast to reach 105 billion cubic feet per day in 2025 and 106 billion cubic feet per day in 2026, while over the past decade U.S. NGL volumes have climbed roughly 133% and LNG export volumes surged more than 26,000%.
The report highlights that midstream companies have also strengthened their financial footing. Many operators have reduced leverage, expanded free cash flow and increased distributions. The Solactive MLP & Energy Infrastructure Index shows leverage improving more than 22% since 2021, while index-level distributions are up nearly 70%. Global X attributes these gains to disciplined capital spending, long-term contracts and inflation-indexed tariff structures that help insulate midstream cash flows from commodity price swings.
Long-haul pipelines remain the most stable performers due to fixed-fee, take-or-pay commitments that limit volume and price risk. Global X notes that midstream operators increasingly self-fund new projects and limit speculative construction, reducing reliance on external financing. These practices have helped improve credit metrics across the sector and support continued investment in key pipeline and processing projects.
Over the long term, structural demand trends continue to support natural gas. Global consumption rose 1.7% annually from 2013 to 2023 and is projected to grow another 34% by 2050. Much of this growth comes from emerging markets and increasing U.S. power-sector gas use, which rose from 34% of deliveries in 2013 to 45% in 2023. The U.S. also remains the world’s largest LNG exporter, with projects like Port Arthur, Rio Grande and Commonwealth expected to expand capacity through the end of the decade.
Global X concludes that midstream infrastructure offers “an attractive combination of defensive characteristics and growth opportunities” as rising natural gas production and continued LNG expansion reinforce the sector’s long-term outlook. With throughput stability, strong balance sheets and structural global demand, North American midstream enters 2025 with a favorable foundation despite broader energy-market uncertainty.