DT Midstream Q2 Earnings Call Highlights

DT Midstream NYSE: DTM said it reached final investment decisions on approximately $300 million of new organic growth projects during the second quarter, advancing expansions across its Haynesville, Midwest and Appalachian operations as natural-gas demand from LNG exports, power generation and data centers continues to support development activity.

Executive Chairman and CEO David Slater said the company has now commercialized 60% of its $3.4 billion organic project backlog, with more than 80% of the commercialized backlog tied to pipeline projects. Management said the projects are supported by long-term contracts and durable customer demand.

The company reported second-quarter adjusted EBITDA of $305 million, down $3 million from the prior quarter. It reaffirmed its 2026 adjusted EBITDA guidance range and its early 2027 adjusted EBITDA outlook, though specific guidance figures were not discussed on the call.

New Projects Advance Haynesville, Viking and Appalachia Growth

President and COO Chris Zona said the newly approved investments include an expansion of the company’s Haynesville system that will increase access to East Texas supply and add 200 million cubic feet per day of capacity to the LEAP pipeline. The expansion is backed by new long-term agreements with two producer customers and is expected to enter service in the second half of 2028.

The project would bring LEAP’s total capacity to 2.3 billion cubic feet per day through a combination of incremental compression and looping. Slater said DT Midstream has been intentional about improving connectivity to Carthage, Texas, which it views as a potential landing point for Permian Basin gas moving eastward toward LNG and domestic demand markets.

“We’re in a robust demand environment right now where all basins will need to grow,” Slater said, adding that he believes the market will require additional Permian and Haynesville production.

Other projects reaching FID include the first phase of modernization work on the Viking pipeline, serving the Twin Cities area of Minnesota. That work is intended to improve reliability and is expected to be in service in the fourth quarter of 2028.

DT Midstream also signed a new long-term gathering agreement supporting a 100 million-cubic-feet-per-day expansion of its Appalachia Gathering System. The expansion is expected to be in service in the fourth quarter of 2027 and will deliver supply into the NEXUS and Texas Eastern systems.

Data Center Demand Supports NEXUS Interconnects

The company commercialized another NEXUS interconnect during the quarter with capacity of 380 million cubic feet per day. The interconnect will provide supply to a natural-gas-fired power generation facility supporting a new data center in Ohio.

Combined with an interconnect disclosed in the first quarter, DT Midstream is adding more than 500 million cubic feet per day of demand pull to the NEXUS mainline, Zona said.

Slater said NEXUS currently has capacity of about 1.4 billion cubic feet per day and is effectively fully contracted, although certain shorter-term contracts periodically roll over. He said the pipeline is positioned to add capacity through compression, noting that a planned compressor station was not built when the asset was originally developed but that the site and related infrastructure are in place.

“The market is ripening,” Slater said, describing the company’s approach as strategic and patient as new demand emerges.

Midwest Expansion Discussions Continue

Management also discussed potential expansions on its Midwestern Gas Transmission system, including the MIST project. Zona said MIST is expected to develop in multiple southbound and northbound phases, with the first phase potentially entering service as early as the end of 2029. The company is working toward binding precedent agreements, with a binding open season identified as the next commercial milestone.

Slater said MIST could be similar to the company’s Guardian G3 project in both size and scale, though management did not provide project-specific capacity or capital estimates. He emphasized that Midwestern Gas Transmission’s ability to access multiple supply sources is a competitive advantage, including connections to Vector, Alliance, Rockies Express, Texas Gas Transmission and Tennessee Gas Pipeline.

DT Midstream said it also sees future opportunities around Guardian, including potential demand tied to utilities and data center development in Wisconsin and Iowa. Management said the timing of any additional Guardian expansion will depend on utility regulatory processes in those markets.

Financial Position and Outlook

Pipeline segment results were $14 million lower than the first quarter, which CFO Jeff Jewell attributed to seasonally lower revenue from joint-venture pipelines and higher revenue on Stonewall in the prior period. Gathering segment results rose $11 million sequentially, helped by higher Blue Union volumes.

Growth capital investment totaled $86 million in the second quarter, in line with the company’s plan. Jewell said growth capital spending is expected to increase over the remainder of 2026.

The projects approved during the quarter raise committed capital to approximately $425 million in 2026 and about $560 million in 2027, according to Jewell. The company also said Moody’s raised its leverage downgrade threshold to 4.25 times on a proportionate basis from 4.0 times, while Fitch increased its threshold to 4.5 times on an on-balance-sheet basis from 4.0 times.

DT Midstream’s board approved a quarterly dividend of $0.88 per share, unchanged from the previous quarter. The company said it remains committed to growing the dividend in line with adjusted EBITDA.

About DT Midstream (NYSE:DTM)

DT Midstream Inc NYSE: DTM is a midstream energy company that owns and operates infrastructure for gathering, processing and treating hydrocarbons and produced water. Its core business activities encompass natural gas gathering, cryogenic processing, natural gas liquids (NGL) fractionation, and produced-water handling services. These integrated operations enable the company to capture and transport multiple hydrocarbon streams from wellhead to market and to provide essential water management solutions.

The company’s asset footprint is concentrated in the Delaware Basin in West Texas and southeastern New Mexico, where it serves a diverse range of exploration and production customers.

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