Kinder Morgan remains bullish on demand

A Kinder Morgan LNG facility. The natural gas pipeline giant remains bullish on natural gas demand. (Image: Kinder Morgan)

Kinder Morgan reported first-quarter net income of $717 million, slightly down from $746 million a year ago, while adjusted net income edged up 1% to $766 million. Adjusted EBITDA also rose 1% to $2.16 billion, driven by solid performance in its Natural Gas Pipelines, CO₂, and Terminals business segments. Free cash flow for the quarter reached $400 million after capital expenditures.

“Despite concerns about an economic downturn, our long-term, fee-based business model continues to provide stability,” said Executive Chairman Richard D. Kinder. “We believe Kinder Morgan remains a reliable port in the storm, as it has in past cycles.”

Kinder Morgan is capitalizing on record U.S. natural gas production and rising demand, especially from liquefied natural gas (LNG) export facilities and power plants. CEO Kim Dang highlighted the company’s growing footprint in the Bakken region with the $640 million acquisition of Outrigger Energy II’s gathering and processing system — a move backed by long-term contracts with major customers.

“Domestic natural gas production hit record highs in the first quarter, and demand continues to surge,” Dang said. LNG feedgas demand alone was up 15% year-over-year, while residential and commercial natural gas use rose 10%.

Looking ahead, Kinder Morgan anticipates U.S. natural gas demand could increase by 20 to 28 billion cubic feet per day (Bcf/d) by 2030. The company currently transports around 7 Bcf/d to LNG facilities and expects that to rise to 11 Bcf/d by the end of 2027, with more projects in development.

At quarter’s end, Kinder Morgan’s project backlog climbed to $8.8 billion — up 8% from the prior quarter — with approximately 91% tied to natural gas infrastructure. Among the latest additions is the $431 million Bridge project, which will deliver 325 million cubic feet per day of firm transportation capacity to meet growing demand in South Carolina.

Business Segment Highlights

Natural Gas Pipelines posted higher earnings, buoyed by increased contributions from the Texas Intrastate system and the Tennessee Gas Pipeline (TGP). Transport volumes rose 3%, though gathering volumes slipped 6% due to lower activity in Haynesville.

Products Pipelines saw earnings decline, primarily due to a scheduled, once-a-decade turnaround at its condensate processing facility and weaker commodity prices. Refined products volumes grew 2%, and crude and condensate volumes rose 4%.

Terminals segment earnings improved, driven by higher rates and full contracting of its Jones Act tanker fleet, partially offset by lower bulk terminal coal activity.

CO₂ and Energy Transition Ventures delivered higher earnings thanks to increased renewable natural gas volumes, although lower D3 Renewable Identification Number (RIN) prices tempered gains.

Outlook and Leadership Changes

Kinder Morgan reaffirmed its 2025 financial guidance, projecting an 8% rise in net income to $2.8 billion and a 10% gain in adjusted EPS to $1.27. The company expects to maintain a healthy balance sheet, targeting a Net Debt-to-Adjusted EBITDA ratio of 3.8 times by year-end.

In corporate leadership news, KMI President Tom Martin announced his retirement effective January 31, 2026. He will transition to an advisory role, supporting the company’s substantial pipeline project portfolio. Dax Sanders, currently President of Products Pipelines, will succeed Martin as President next year, while Michael Garthwaite will take over Sanders’ current role.