Baker Hughes has strategically aligned its portfolio to capitalize on robust long-term natural gas and LNG demand growth, supported by a record equipment backlog. The company is focusing its comprehensive suite of technologies and services to execute a significant wave of global LNG capacity expansion.

Bullish Market Fundamentals and Record Backlog

The company is optimistic about sustained high demand for natural gas, forecasting a 20% increase by 2040. This growth is driven by power requirements from data centers and AI operations. For LNG specifically, demand is projected to surge by about 75% by 2040. Baker Hughes exited last year with a record equipment backlog of $32.4 billion in its Industrial & Energy Technology division, a key indicator of global confidence in gas and LNG projects. The company is committed to executing all projects within this substantial backlog.

LNG Expansion and Strategic Positioning

Momentum is strong, particularly on the US Gulf Coast, with the US now the world's largest LNG exporter. Global liquefaction capacity is expected to approach 800 million tonnes per annum by 2030. Baker Hughes believes it is uniquely positioned to support this growth across various project scales—from onshore megaprojects to mid-scale and modular trains—due to its vast portfolio of solutions. The company's earlier projection that 100 million tpa of LNG projects would reach final investment decision between 2024 and 2026 is on track to be met or exceeded this year, with over 80 million tpa already achieved in 2024-2025.

Technology Investments Shaping Future Infrastructure

Baker Hughes is investing in key technology groups to shape next-generation infrastructure. A major focus is the electrification of liquefaction, enhanced by the 2022 acquisition of Brush Power Generation, which allows the company to provide electric motors and generators for electrically driven LNG trains. An example is supplying 75 MW motors powered by cleaner grid sources for the Ruwais project in the UAE. Another critical investment is in digital optimization, with more than 2000 assets under 24/7 monitoring for predictive analytics and maintenance.

Supply Chain and Manufacturing Adaptations

While some supply chain bottlenecks have eased, availability remains tight for certain equipment like gas turbines, which are in high demand from LNG, utilities, and data centers. Baker Hughes is managing this by diversifying sub-supplier relationships, securing capacity ahead of new awards, and confirming factory and supplier capacity before making project commitments. The company is also expanding manufacturing and supplier flexibility to meet sustained demand.

Advancements in Project Execution

Significant progress is being made in modular construction for LNG, which reduces onsite labor needs—especially beneficial in harsh climates or areas with limited skilled workers. This approach allows Baker Hughes to maximize execution in controlled shop and yard environments, using facilities like Avensa in Italy to assemble prefabricated and tested modules before shipment. This method helps operators reduce design and construction time while improving quality control.

Broader Strategic Role of Gas-Fired Power

Beyond LNG, gas-fired power generation remains central to Baker Hughes' long-term strategy. This is due to its role in helping grid operators manage the dual challenges of renewable energy intermittency and the accelerating power demand from data center growth.