Baker Hughes' CEO, Lorenzo Simonelli, stated that the company has not observed a slowdown in investment for major energy projects, attributing this to robust demand for natural gas and power linked to the growth of artificial intelligence infrastructure.
He emphasized that the bankability of projects relies on existing offtake agreements and the outlook for energy demand, which remains strong due to increasing population and industrial needs. The ongoing conflict in Iran has disrupted energy flows and pushed oil prices above $100 a barrel, raising concerns about inflation and borrowing costs.
However, Simonelli noted that high prices could stimulate investment to increase supply in the future. Baker Hughes anticipates that installed LNG capacity must reach 900 million tons per annum by 2035 to satisfy future demand, with AI contributing significantly to this demand.
The company is also adapting to grid constraints in Southeast Asia by providing equipment for distributed power generation. With a backlog exceeding $37 billion, Baker Hughes sees natural gas as a crucial component in meeting the growing energy needs, asserting that it is not merely a transition fuel but a destination fuel in the current energy demand decade