Baker Hughes says it has not yet seen higher borrowing costs derail investment in major energy projects. Chairman and CEO Lorenzo Simonelli said demand for natural gas and electricity remains strong, supported by the global expansion of artificial intelligence infrastructure.
Speaking to CNBC at the Gastech conference in Bangkok, Simonelli said the company has not observed a slowdown so far. He said project bankability is largely supported by existing offtake agreements and the broader outlook for energy demand. Financing remains an important consideration, he added, but rising demand from population growth, industry and data centers continues to underpin investment decisions.
His comments come as the Iran war has disrupted Middle Eastern energy flows and pushed oil prices back above $100 a barrel, adding to inflation and borrowing-cost concerns. The conflict has also unsettled natural gas markets, with shipping restrictions through the Strait of Hormuz threatening LNG supplies from Qatar, one of the world’s largest exporters.
Simonelli said high prices can themselves encourage the investment needed to bring additional supply to market over time. In his view, the sector remains “full steam ahead” for companies looking beyond short-term volatility, while today’s elevated prices can help support tomorrow’s supply growth.
Baker Hughes expects prices to remain range-bound over time and sees limited risk that the coming wave of LNG supply will create a prolonged glut. The company estimates installed LNG capacity will need to reach 900 million tons per annum by 2035 to meet future demand.
The company also sees AI as an increasingly important source of that demand. Simonelli said Baker Hughes does not expect the rapid buildout of data centers to slow, even as concerns grow over their electricity and water use. He added that the company is expanding capacity to meet that demand.
In Southeast Asia, grid constraints are pushing some data-center operators toward behind-the-meter and distributed power generation solutions, a segment where Baker Hughes supplies equipment. Simonelli said natural gas will play a central role in meeting rising electricity needs. Baker Hughes has more than $37 billion in backlog, including demand tied to gas infrastructure, data-center power generation and LNG, he said.
In Simonelli’s words, natural gas is “not a transition fuel; it’s a destination fuel.” He said the world is entering an “energy demand decade,” with gas at the center of it.
