Kinder Morgan Inc. (KMI) started 2025 with record natural gas volumes on the company’s pipeline network. The midstreamer said strong growth for the rest of the year is expected, regardless of the current state of politics.
Executive Chairman Rich Kinder warned investors should take in the whole picture and “not be whipsawed by the perceived ups and downs of just one or two facets of the growth story.”
Kinder Morgan held its first-quarter 2025 earnings call on April 16. KMI’s results were in line with analysts' expectations, with adjusted EBITDA coming in at $2.157 billion, according to TPH Energy analyst Zack Van Everen.
CEO Kim Dang said the company’s results met expectations. Natural gas demand grew by 6.8 Bcf/d year-over-year, driven by record winter usage and ramping LNG activity.
KMI expects continued growth and added $900 million to its project backlog, which now stands at $8.8 billion. More than 70% of these new projects are focused on serving the power sector.
Executives discussed heavy growth in the U.S. Southeast, especially in South Carolina. In February, KMI announced a $431 million extension to the Elba Express, which will add 71 miles to the pipeline into South Carolina, adding 325 MMcf/d of capacity.
“I will tell you, South Carolina is one of the fastest growing states that we see out there,” said Tom Martin, KMI President. “Demand is growing from a power side, from a residential need standpoint and the opportunity set around potential data centers could be there.”
While most projects are power focused, the company expects most natural gas demand to be driven by the LNG sector. Rich Kinder said that while the future is difficult to predict, the LNG sector has a lot of confidence.
“We estimate that growth to be somewhere around 16 Bcf a day, with the great bulk of that coming from facilities already under construction or that have been FID’ed,” Kinder said. “To FID a project means it is supported by long-term contracts with creditworthy entities, otherwise, these facilities simply could not be financed.”
Kinder also noted the LNG export market was likely to remain solid, pointing to the current U.S.-China trade fight.
“The naysayers argue that a trade war with China will lead to a diminution in the need for U.S. LNG,” he said. “China has not imported any U.S. LNG since February, and yet feedgas demand is setting records, averaging 15.5 Bcf a day in the first quarter and approaching 17 Bcf a day on several recent days.”
In the first quarter, KMI closed its $640 million acquisition of Outrigger’s Bakken assets, enhancing its integration into that basin, said CFO David Michels.
Michels emphasized the company’s commitment to capital discipline. Net debt sits at $32.8 billion and 4.1x net debt to adjusted EBITDA. The metric will improve as Outrigger contributions are realized. KMI also declared a $0.2925 per-share dividend for the quarter (up 2% year-over-year).
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