Kinder Morgan earnings climb on strong natural gas demand
US energy infrastructure company Kinder Morgan (KM) on January 22 reported net income in Q4 2024 of $667mn, up 12.3% from $594mn in the same period a year earlier and attributed the improvement to increased contributions from its natural gas pipelines business and from its products pipelines and terminals segments.
Adjusted EBITDA was 7% higher, at $2.06bn versus $1.92bn.
Alongside the quarterly financial results, KM said it had sanctioned its $1.7bn Trident Intrastate Pipeline Project, a 216-mile pipeline underpinned by long-term contracts that will move about 1.5bn ft3/day of natural gas from Katy, Texas to the LNG and industrial corridor near Port Arthur, Texas. Pending receipt of all permits and approvals, it is expected to be in-service in Q1 2027.
“Further, during the quarter we secured additional long-term, binding transportation agreements on our previously announced Mississippi Crossing Project, resulting in a current project subscription of approximately 1.8bn ft3/day,” KM CEO Kim Dang said. “The estimated $1.6bn project is now designed to transport up to 2.1bn ft3/day of natural gas through the construction of nearly 206 miles of 42-inch and 36-inch pipeline and three new compressor stations.”
For several quarters, Kinder Morgan has been anticipating “significant” new demand from LNG producers, power plants and data centres, Dang said, and those expectations are now being realised.
“Our commercial teams have secured contracts to underpin three large natural gas projects – South System Expansion 4 (SSE4), Mississippi Crossing and Trident – totaling approximately $5bn (KM share) in project costs,” he said. “These projects are all progressing and are expected to contribute to significant future growth once in service.”
KMI’s project backlog, Dang said, reflects this strong natural gas demand, with about 89% of the Q4 backlog of $8.1bn (up 60% from Q4 2023) attributed to natural gas projects.
Preliminary survey work continues on SSE4, a $3bn project designed to increase the capacity of the South Line of the Southern Natural Gas (SNG) system by about 1.2bn ft3/day. It will be completed in two phases and is almost entirely comprised of brownfield looping and additional compression on the SNG and Elba Express pipeline systems. Subject to all required approvals, the first phase is expected in service in Q4 2028, with phase 2 expected a year later.
Preliminary construction activities are underway on the fully contracted Gulf Coast Express Pipeline expansion, a $455mn project to increase deliveries from the Permian Basin to South Texas markets by about 570mn ft3/day. The project is expected to be in service in mid-2026.
And construction continues on the second phase of the $672mn Evangeline Pass project, which involves modifications and enhancements to portions of Kinder Morgan’s Tennessee Gas Pipeline and SNG systems in Mississippi and Louisiana to facilitate the delivery of some 2bn ft3/day of feed gas to Venture Global’s Plaquemines LNG facility. Evangeline Pass has an expected in-service date of July 1, 2025.