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DATE
Wednesday, Oct. 21, 2026
CALL PARTICIPANTS
- Executive Chairman – Rich Kinder
- Chief Executive Officer – Kim Dang
- President – Dax Sanders
- Vice President and Chief Financial Officer – David Michels
- President, Natural Gas Pipelines – Sital Mody
- President, CO2 and Energy Transition Ventures – Anthony Ashley
TAKEAWAYS
- Net Income — $764 million, representing a 22% increase from $628 million in the third quarter of 2025.
- Adjusted EBITDA — $2.18 billion, growing 9% year over year driven by contributions across all four business segments.
- Adjusted EPS — $0.35, an increase of 21% from $0.29 in the prior year period.
- Expansion Project Backlog — $14.4 billion, including $5.4 billion in new project additions net of $700 million in projects placed in service during the quarter.
- Natural Gas Project Backlog — $13.2 billion, reaching a record level and representing approximately 92% of the total expansion backlog.
- Full-Year Financial Guidance — Adjusted EPS expected to exceed budget by more than 13% and Adjusted EBITDA expected to exceed budget by more than 6% based on year-to-date performance.
- Net Debt-to-Adjusted EBITDA — 3.5 times, ending the quarter at the low end of the company’s targeted range and improving from 3.8 times at the start of the year.
- Southeast Connector Project — $3.1 billion KMI investment, designed to transport 2.6 billion cubic feet of natural gas per day into the Southeast starting in late 2030.
- Permian Link Project — $1.6 billion KMI share of a $4.2 billion total project, providing 2.8 billion cubic feet per day of capacity for an A-rated hyperscaler.
- Natural Gas Transport Volumes — 49,273 billion British thermal units per day, up 3% due to higher LNG feed gas deliveries and intrastate demand.
- Natural Gas Gathering Volumes — 4,722 billion British thermal units per day, a 14% increase led by a 40% rise on the KinderHawk system in the Haynesville.
- Refined Product Volumes — 1,596 thousand barrels per day, down 3% year over year reflecting a higher commodity price environment.
- Crude and Condensate Volumes — 410 thousand barrels per day, an 11% decline resulting from the removal of Double H from service and fewer well connections at Hiland Crude.
- Terminal Export Activity — 427,000 barrels per day across Houston Ship Channel docks, representing a 39% increase and an all-time record.
- Western Gateway Project — $300 million total investment to deliver 230,000 barrels per day of refined products to Arizona and California by 2029.
- CO2 Net Oil Production — 27.07 thousand barrels per day, an 8% increase driven primarily by 11% volume growth at the SACROC field.
- Creekside Lateral Project — $235 million in total capital, providing more than 750 million cubic feet per day of capacity for data centers and industrial customers in Central Texas.
- Bear Creek Storage Expansion — $120 million KMI share of a $160 million project, adding 10 billion cubic feet of storage capacity by April 2029.
- Nonrecurring Earnings Items — $225 million, consisting of impacts from winter weather, a contract buyout, a FERC rate true-up, and favorable Waha spreads.
- Quarterly Dividend — $0.2975 per share, representing a 2% increase over the third quarter of 2025.
- Expansion Capital Expenditures — $4 billion estimated annual run rate for the next few years to fund the expanded project backlog.
- Project Backlog Multiple — 5.7 times, representing the expected aggregate first-full-year project EBITDA from $13.7 billion of the expansion backlog.
- Tampa Terminal Divestiture — $139 million, representing the sale of three dry bulk terminals to Watco Companies.
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RISKS
- Dax Sanders indicated that the temporary Jones Act waiver introduced market uncertainty, although the company’s tanker fleet remains heavily contracted through firm commitments.
- Sanders stated, “Crude and condensate volumes were down 11%,” resulting from the Double H pipeline conversion and fewer well connects at Hiland Crude.
- Kim Dang acknowledged that the company experienced “struggles” in its renewable natural gas business during earlier periods, though operational performance has since improved.
- David Michels noted that 2026 outperformance included $175 million from favorable commodity prices that may not be sustainable depending on future price decks.
SUMMARY
Kinder Morgan, Inc. (KMI +1.19%) reported record quarterly results, supported by growth across its natural gas, products, terminals, and CO2 segments. Management reported a significant expansion of the project backlog, primarily for natural gas infrastructure projects designed to serve the Southeast and Permian regions. The company reached final investment decisions on two large-scale pipeline projects supported by long-term take-or-pay contracts with investment-grade utilities and a hyperscaler. Management stated that the current market environment is supported by rising demand for electricity and global exports, leading to an upward revision of the full-year financial outlook.
- Executive Chairman Rich Kinder highlighted projections from Shell showing global LNG demand rising 65% by 2050 and NERC estimates of U.S. peak electricity demand growing by up to 245 gigawatts by 2035.
- CEO Kim Dang stated, “Large load interconnection requests across the Southeast now exceed 200 gigawatts,” which could represent roughly 8 billion cubic feet per day of natural gas demand.
- The Permian Link project includes a 20-year take-or-pay contract with an A-rated hyperscaler, utilizing storage links to provide specific reliability requirements for data centers.
- Management projected that the projects currently in the backlog will contribute approximately $2.5 billion in additional annual EBITDA upon completion.
- Sital Mody reported that the non-binding open season for the Tennessee Gas Pipeline 219 South project received interest for over 2 billion cubic feet per day of capacity.
- CEO Kim Dang indicated that while the company is comfortable completing projects under the current regime, the proposed permitting reform would strengthen the Nationwide Permit 12 program.
- Management reported the Trident project is on schedule for a February 2027 delivery, with 30% of its contracted EBITDA expected to begin in that year.
INDUSTRY GLOSSARY
- BBtu/d: Billion British thermal units per day, a measure used to quantify natural gas transport and sales.
- Bcf/d: Billion cubic feet per day, a common unit of measurement for large-scale natural gas production and transport capacity.
- EOR: Enhanced Oil Recovery, a technique used to increase the amount of crude oil that can be extracted from an oil field, often using CO2.
- FID: Final Investment Decision, the point in a capital project where the company formally approves the investment and proceeds with construction.
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Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
