Kinder Morgan net income up 17.5%, 5-bcfd gas demand growth anticipated

Kinder Morgan Inc. (KMI) reported third-quarter 2024 net income $625 million, compared with $532 million a year earlier. The company also took final investment decision on the 570-MMcfd expansion of its Gulf Coast Express natural gas pipeline running from the Permian basin to Corpus Christi, Tex., during the quarter. It expects to place the expansion in service mid-2026.

KMI similarly plans to expand its NGPL Gulf Coast storage, adding 10 bcf of incremental natural gas capacity to affiliate Natural Gas Pipeline Co. of America LLC’s Gulf Coast system. The moves have taken in the context of what chief executive officer Kim Deng described as “well in excess of 5 bcfd” of anticipated natural gas demand growth associated with coal conversions at power plants and demand for electric generation to address artificial intelligence operations, cryptocurrency mining, data centers, and industrial re-shoring.

For 2024, including contributions from the acquired STX Midstream assets, KMI budgeted net income attributable to KMI of $2.7 billion ($1.22 per share), up 15% versus 2023, and expects to declare dividends of $1.15 per share for 2024, a 2% increase from the dividends declared for 2023.

The company’s natural gas pipelines business segment’s improved financial performance in third-quarter 2024 relative to third-quarter 2023 benefited from continued higher contributions from its Texas Intrastate system, additional contributions from its STX Midstream acquisition, and higher contributions from expansion projects on Tennessee Gas Pipeline (TGP), partially offset by lower contributions from its gathering systems due to asset divestitures and lower commodity prices. Natural gas transport volumes were up 2% compared with third-quarter 2023.

KMI attributed reduced contributions from its products pipeline segment to lower commodity prices and the associated impact on inventory used to support its transmix and crude and condensate businesses. Its terminals segment earnings improved, however, liquids terminals benefitting from expansion projects placed into service as well as higher rates and utilization at the company’s New York Harbor hub facilities.

Preliminary survey work is underway on KMI’s South System Expansion 4 (SSE4) Project, designed to increase Southern Natural Gas (SNG) Co.’s South Line capacity by 1.2 bcfd. The project is designed to help meet growing power generation and local distribution company demand in southeast US markets. SSE4 will be almost entirely comprised of brownfield looping and horsepower compression additions on the SNG and Elba Express (EEC) pipeline systems. Subject to all required approvals, KMI expects the project to be in service beginning late 2028.

Construction is ongoing for the second phase of KMI’s Evangeline Pass project, which has an expected in-service date of July 1, 2025. The two-phase project involves modifications and enhancements to portions of the Tennessee Gas Pipeline Co. LLC and SNG systems in Mississippi and Louisiana, resulting in the delivery of 2 bcfd of natural gas to Venture Global LNG Inc.’s 20-million tonne/year Plaquemines LNG plant. The 900-MMcfd first phase entered service July 1, 2024.