Fitch Ratings’ neutral sector outlook for North American midstream issuers reflects relatively supportive sector fundamentals in 2025, alongside a modestly positive macroeconomic environment. The potential for weather and/or geopolitical events to disrupt near-term supply/demand dynamics led to Fitch’s assessment of a neutral 2025 operating environment, compared to 2024. This view is set within relatively supportive commodity price assumptions, including an expected increase in the price of natural gas.
Exports of hydrocarbons from North America remains an important sector theme, with near-term liquified natural gas (LNG) export capacity additions expected in the United States and Canada. Complementing exports is refreshed domestic demand growth for natural gas driven by electricity generation, partially in support of the rapid expansion of data centers.
Fitch believes 2025 could see meaningful midstream growth project announcements, directly aimed at meeting the power demands brought on by the proliferation of AI. Consolidation has generally been supportive of credit profiles, and Fitch sees more consolidation happening in 2025 among midstream issuers as well as upstream customers.
Related: Phillips 66 grows Permian midstream business with EPIC NGL acquisition
