Kinder Morgan NYSE: KMI expects its natural gas business to remain its primary growth engine, supported by rising demand tied to liquefied natural gas exports and power generation, Chief Executive Officer Kim Dang said at a Barclays conference.
Dang said natural gas represents about two-thirds of Kinder Morgan’s business and is the segment where the company expects the most growth. The company expects to sanction at least $1.4 billion of new natural gas projects by year-end, which would help restore its project backlog to more than $10 billion.
Kinder Morgan’s backlog stood at approximately $10.1 billion at the end of the first quarter and declined to about $9.6 billion in the second quarter as projects entered service. The company expects to place another $1 billion of projects into service during the second half of the year.
Dang emphasized that Kinder Morgan’s backlog consists of board-approved projects that are moving forward, rather than preliminary opportunities. About 90% of the backlog is supported by take-or-pay contracts, she said. The company also has an approximately $10 billion opportunity set outside the sanctioned backlog, though Dang said Kinder Morgan does not expect to secure every project under consideration.
Natural gas demand outlook supports project pipeline
Dang cited Wood Mackenzie projections showing U.S. natural gas demand increasing from nearly 115 billion cubic feet per day in 2025 to 160 Bcf per day by 2035. She said the forecast growth is primarily tied to LNG exports, estimated at about 23 Bcf per day, and power demand, estimated at about 17 Bcf per day.
Kinder Morgan operates 80,000 miles of pipeline and serves 40% of U.S. natural gas demand, according to Dang. The company moves 40% of volumes heading to LNG export facilities and 50% of U.S. natural gas exports to Mexico, she said.
Using a 5.6x multiple across its $9.6 billion backlog, Dang said the projects represent roughly $1.7 billion of incremental EBITDA. The average in-service date for the backlog is in the first half of 2028, meaning projects are expected to contribute some growth in 2027 but more substantially in 2028 and 2029. Newly sanctioned projects are expected to extend that growth into late 2029 and 2030.
Expansion opportunities from Appalachia to the Southeast
Among Kinder Morgan’s potential projects is an expansion of Tennessee Gas Pipeline, or TGP, that would move more than 500 million cubic feet per day of gas from the Marcellus and Utica region in northwestern Pennsylvania to an area near Nashville, Tennessee.
The company recently completed a nonbinding open season for the project and received what Dang described as “tremendous interest.” Kinder Morgan is now following up with prospective customers to determine delivery locations and the timing of demand before seeking binding commitments.
Dang said the Marcellus and Utica need additional pipeline capacity to support projected production growth. While some smaller northern expansions may be possible, she said larger-scale growth will likely require new routes southward toward power markets in Tennessee, Kentucky, West Virginia and potentially Ohio, as well as LNG markets over the longer term.
A TGP expansion could potentially support further development across Kinder Morgan’s Southeast pipeline system. Dang said gas could move farther south through TGP, connect with the Mississippi Crossing pipeline that Kinder Morgan expects to begin building in the fall, continue through Mississippi Crossing, and ultimately reach South System 5 and LNG export markets.
She also pointed to potential power demand in Georgia, citing a Georgia Power economic development report showing 75 gigawatts of potential new power generation through the middle of 2035. Dang estimated that figure could equate to roughly 15 Bcf per day of gas demand, while noting that not all of the potential generation would use natural gas or necessarily be built.
Texas, Permian and refined-products initiatives
In Texas, Kinder Morgan is building the Trident pipeline system, which will move gas from the Katy area near Houston to Port Arthur and connect with pipelines into Louisiana. Dang said the first phase is expected to be completed in the first quarter of 2027, while the second phase is planned for late 2028. The system has a small amount of remaining capacity, and further expansion could involve compression additions or additional pipeline construction.
Dang said existing announced capacity appears sufficient to move Permian gas to the Gulf Coast “for the foreseeable future.” However, Kinder Morgan is seeing opportunities to serve demand near the basin, including power plants and data centers. Its nonbinding open season for the proposed Permian Link project on Natural Gas Pipeline Company of America, which would move Permian supply to the Texas Panhandle, generated substantial interest, she said.
On the refined-products side, Dang discussed the Western Gateway joint venture with HF Sinclair and Phillips 66. Kinder Morgan holds a 35% stake in the venture, which is building a pipeline from the Borger refinery in the Texas Panhandle to Phoenix. The project is intended to transport Mid-Continent supply to Arizona and California as refinery shutdowns increase California’s reliance on waterborne imports.
Kinder Morgan is contributing assets valued at about $1.5 billion and $250 million of cash equity to the venture. Dang said the new pipeline is expected to have capacity of about 230,000 barrels per day, with potential to expand beyond 320,000 barrels per day.
Capital allocation and hedging
Dang said Kinder Morgan can fund more than $3 billion of annual expansion capital expenditures through cash flow and retains additional balance-sheet flexibility. Its debt-to-EBITDA ratio was about 3.6x, near the low end of its 3.5x to 4.5x target range, she said.
The company also remains active in bolt-on acquisitions that fit existing systems. Dang cited the Monument acquisition as an example of an asset that complements Kinder Morgan’s Texas intrastate network.
In its CO2 segment, which represents about 7% of the company overall, Kinder Morgan’s oil and gas production business accounts for about 4% of the total company. Dang said the company was about 90% hedged for 2026 and approximately 75% hedged for 2027 at prices in the mid-$60 per barrel range. She said oil and gas volumes in the segment have exceeded budget so far this year.
About Kinder Morgan (NYSE:KMI)
Kinder Morgan, Inc NYSE: KMI is an energy infrastructure company that owns and operates pipelines, terminals, and storage facilities across North America. Its assets transport and store natural gas, crude oil, refined petroleum products, renewable fuels, and carbon dioxide.
The company's natural gas business supports gathering, processing, transportation, and storage, while its products pipeline network serves refineries, airports, utilities, and other industrial customers. Kinder Morgan also operates bulk and liquids terminals that handle energy products and other commodities, along with carbon dioxide infrastructure used in enhanced oil recovery and related applications.
Founded in 1997, Kinder Morgan has expanded through acquisitions and the development of energy infrastructure in the United States and Canada.
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