Kinder Morgan Targets $1.4B in Gas Projects

Kinder Morgan expects to sanction at least $1.4 billion in new natural-gas projects by the end of 2026. Chief Executive Officer Kim Dang announced the plan at a Barclays conference, noting that these additions would push the company's project backlog back above $10 billion. The backlog had declined from $10.1 billion in the first quarter to $9.6 billion in the second quarter as assets entered service, with another $1 billion scheduled to go live during the second half of the year.

Dang said natural gas represents about two-thirds of Kinder Morgan's business. The company operates 80,000 miles of pipeline, handling 40% of U.S. natural gas demand, 40% of volumes moving to liquefied natural gas export terminals, and 50% of gas exports to Mexico. Citing Wood Mackenzie forecasts, Dang noted that U.S. natural gas demand is projected to increase from nearly 115 billion cubic feet per day in 2025 to 160 billion cubic feet per day by 2035, driven by 23 billion cubic feet per day in LNG export growth and 17 billion cubic feet per day in power demand.

Board-approved projects in the current $9.6 billion backlog are roughly 90% backed by take-or-pay contracts. Dang stated that the existing backlog represents approximately $1.7 billion in incremental EBITDA, using a 5.6x multiple, with the strongest financial contributions anticipated in 2028 and 2029. Outside of approved projects, Kinder Morgan tracks an additional $10 billion commercial opportunity set.

The pipeline operator is advancing several regional ventures, including a potential expansion of the Tennessee Gas Pipeline to transport over 500 million cubic feet per day from the Marcellus and Utica regions southward. In Texas, the Trident pipeline system is scheduled to complete its first phase in early 2027 and its second in late 2028. Kinder Morgan also holds a 35% stake in the Western Gateway refined-products pipeline venture with HF Sinclair and Phillips 66, contributing $250 million in cash equity and $1.5 billion in assets for a line planned at 230,000 barrels per day.

Financially, Kinder Morgan can fund more than $3 billion in annual expansion capital expenditures out of operating cash flow. Dang reported a debt-to-EBITDA ratio of about 3.6x, near the lower boundary of its 3.5x to 4.5x target range. In its CO2 division, oil and gas production is roughly 90% hedged for 2026 and 75% hedged for 2027 in the mid-$60 per barrel range.