DT Midstream Q3 Earnings Call Highlights

Key Points

• DT Midstream raised its 2026 outlook, forecasting adjusted EBITDA of $1.185 billion to $1.225 billion and distributable cash flow of $860 million to $890 million, while cutting its growth-capital range to $375 million to $425 million.
• The company reached final investment decisions on roughly $400 million of new projects, including the MIST Southbound expansion, a lateral for a proposed 900-megawatt power plant and the second phase of Guardian Pipeline modernization. Total committed capital rose to approximately $2.4 billion.
• Third-quarter adjusted EBITDA was $301 million, while management expects fourth-quarter results to decline because of Stonewall capacity outages, higher expenses and weaker Northeast gathering volumes. Executives nevertheless cited strong long-term gas demand from LNG exports, power generation and data centers.

DT Midstream NYSE: DTM raised its 2026 adjusted EBITDA guidance after reporting third-quarter adjusted EBITDA of $301 million and reaching final investment decisions on approximately $400 million of new organic growth projects.

Chairman and CEO David Slater said the company’s year-to-date performance supported a higher outlook, while demand for natural gas infrastructure continues to be supported by LNG exports, new power generation and anticipated data-center-related electricity demand. DT Midstream now expects 2026 adjusted EBITDA of $1.185 billion to $1.225 billion, while reaffirming its early 2027 outlook.

“We continue to execute our pure-play natural gas-focused strategy, commercializing organic growth opportunities supported by strong customer demand,” Slater said.

New Midwestern and Guardian Investments

The company said it reached FID on three projects in its pipeline segment, taking total committed capital to about $2.4 billion. Slater said this represents approximately 70% of the company’s five-year organic project backlog and is roughly twice its 2026 adjusted EBITDA guidance. Committed capital has increased 50% over the past nine months, he said.

President and COO Chris Zona detailed the projects, including the MIST Southbound Phase 1 expansion, or MIST S1, on the Midwestern pipeline system. The project is designed to serve incremental power-generation demand in Southern Indiana and is expected to increase Midwestern’s capacity by about 300 million cubic feet per day, or 20%.

MIST S1 is backed by investment-grade utilities under 20-year negotiated-rate contracts and is expected to enter service in the fourth quarter of 2029. The expansion includes incremental compression and pipeline looping.

DT Midstream also approved a pipeline lateral to serve a proposed 900-megawatt power plant. That lateral has a 20-year demand-based contract with a utility offtaker and is expected to begin service in the first half of 2028.

“Together, these projects demonstrate our ability to leverage the strategic location of our Midwestern pipeline to capture growth through both mainline and lateral investments,” Zona said.

The company also approved the second phase of its Guardian Pipeline modernization program, which is expected to enter service in the third quarter of 2030. The first phases of modernization at Guardian, Midwestern and Viking remain on schedule, according to Zona. Guardian recently received Federal Energy Regulatory Commission approval for its rate-case settlement, which will provide recovery for the first-phase modernization investment beginning in mid-2027.

Further Pipeline, Storage Opportunities Under Review

Management said it continues to evaluate additional growth projects across its network. On Millennium, DT Midstream has launched an open season for the Ramapo Enhancement project, intended to add capacity for Northeast demand with a targeted fourth-quarter 2028 in-service date.

Other opportunities cited by management include the Vector 2030 expansion, Guardian G4 expansion and Haynesville system expansions. The Guardian G3 project is continuing through the FERC certificate process, with an order expected in mid-2027, Zona said. All other projects currently under construction or development remain on schedule and on budget.

During the question-and-answer session, executives said MIST’s next potential phases are being evaluated for customer needs in 2030 and 2031. The company’s initial nonbinding open season for the broader MIST opportunity was oversubscribed, while a subsequent binding open season for 2029 capacity supported the Phase 1 investment decision.

Slater said the company is focused on supplying the new MIST S1 contracts primarily through the Rockies Express Pipeline, or REX, while emphasizing Midwestern’s ability to receive gas from multiple pipelines exiting Appalachia, as well as from Vector and other southern connections.

Management also pointed to demand for additional storage, particularly high-deliverability storage that could help customers manage volatility associated with growing power-generation needs. Zona cited an opportunity to provide enhanced deliverability services at the company’s Washington 10 asset.

Third-Quarter Results and Capital Outlook

Third-quarter adjusted EBITDA of $301 million was $4 million below the prior quarter. Pipeline segment results increased $2 million sequentially, driven by higher revenue from joint venture pipelines. Gathering segment results declined $6 million, reflecting lower Northeast volumes, CFO Jeff Jewell said.

For the fourth quarter, DT Midstream expects results to be below third-quarter levels due to offline capacity and incremental expenses at Stonewall, as well as lower Northeast gathering volumes tied to producer curtailments and downstream outages.

The company raised its 2026 distributable cash flow guidance to a range of $860 million to $890 million. It also reduced its 2026 growth-capital range to $375 million to $425 million, citing capital efficiency. The revised midpoint represents a reduction of more than 10% from the prior capital range midpoint.

• MIST S1 and the power-plant lateral are expected to require $275 million to $325 million of investment.
• Guardian Phase II modernization is expected to require $130 million to $150 million.
• Committed capital for 2027 is approximately $610 million.
• Total committed capital across 2026 and 2027 is approximately $1 billion.

DT Midstream expects year-end leverage of about 2.8 times on an on-balance-sheet basis and approximately 3.4 times on a proportionate basis.

The board approved a third-quarter dividend of $0.88 per share, unchanged from the prior quarter. Jewell said the company remains committed to increasing the dividend in line with adjusted EBITDA growth.

Natural Gas Demand Outlook

Slater said third-party forecasts project U.S. natural gas demand will grow by more than 25 billion cubic feet per day through 2030, driven by LNG exports and increasing power demand. He said geopolitical tensions in the Middle East could contribute to a longer-lasting shift toward U.S. LNG supply.

Management also cited utility regulatory filings in the Upper Midwest that contemplate substantial new natural-gas-fired generation in the early to mid-2030s. Slater said Michigan utility integrated resource plans alone include 3.5 gigawatts of new generation in the early 2030s, which he estimated could require 600 million to 700 million cubic feet per day of additional gas demand.

Gathering volumes during the quarter averaged 2.17 billion cubic feet per day in the Haynesville and 1.25 billion cubic feet per day in the Northeast. The company expects Haynesville volumes to remain near third-quarter levels in the fourth quarter, while Northeast volumes are expected to decline due to producer curtailments and downstream outages.

On the longer-term outlook, executives said near-term commodity-price weakness has contributed to some curtailments, particularly in the Northeast. However, they characterized the market as shifting from a supply-push environment toward a demand-pull market as LNG, industrial and power demand expands.

About DT Midstream (NYSE:DTM)

DT Midstream, Inc NYSE: DTM is an independent North American energy company focused on the transportation, storage and gathering of natural gas. The company owns and operates interstate and intrastate pipeline systems, natural gas storage facilities, and gathering and processing infrastructure that connect producers with utilities, power generators, industrial customers and other energy markets.

DT Midstream's operations are concentrated in the United States, including the Midwest, Northeast and Gulf Coast regions.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.