Kinder Morgan (NYSE:KMI) executives pointed to an unusually strong start to 2026 and an improving long-term demand outlook for U.S. natural gas during the company’s first-quarter earnings call, highlighting weather-driven performance, increased project activity, and a pending pipeline acquisition in Texas.
Management emphasizes natural gas demand outlook
Executive Chairman Rich Kinder said natural gas demand growth has repeatedly exceeded the company’s expectations in recent years, driven by LNG feed gas demand and increased gas-fired power generation. He said recent Middle East events could further shift LNG preference toward U.S. supply, citing damage to Qatari liquefaction facilities and uncertainty regarding ship traffic through the Strait of Hormuz.
He added that the INGAA Foundation estimates North America will require 70 Bcf per day of new gas pipeline capacity by around 2050, arguing that Kinder Morgan’s asset footprint positions it to capture opportunities. Kinder said the company intends to expand and extend its assets “in an aggressive but disciplined manner,” financing growth “primarily with internally generated cash flow,” while maintaining a strong balance sheet and growing the dividend.
First-quarter results and updated 2026 expectations
CEO Kim Allen Dang said the company delivered what she described as “a remarkable first quarter,” with adjusted EPS up 41% and EBITDA up 18% versus the first quarter of 2025. She said every segment grew year over year and exceeded budget, with natural gas contributing the largest share of outperformance due to Winter Storm Fern and prolonged cold in the Northeast.
CFO David Michels reported net income attributable to Kinder Morgan of $976 million, with EPS of $0.44, which he said were 36% and 38% higher, respectively, than the first quarter of 2025. Michels said the results reflected “strong demand fundamentals across the country,” the company’s asset positioning, and execution across business units.
For full-year 2026, Dang said the company expects to exceed its EBITDA budget by more than 3%, excluding any contribution from the Monument Pipeline acquisition. Michels quantified the outperformance as “over $250 million of additional EBITDA contribution.” Dang said most, “but not all,” of the outperformance is attributable to the first quarter and said the company is taking a conservative approach given it is still early in the year. She added that continued strength in the gas business and/or higher oil prices—benefiting the CO2 segment’s roughly 10% unhedged oil exposure—could provide upside.
Project backlog grows; data center-driven demand highlighted
Dang said Kinder Morgan’s expansion project backlog increased to $10.1 billion, up $145 million from the previous quarter. She said the company placed approximately $230 million of projects into service and added $375 million in new projects, including three data center deals. Dang said the backlog multiple remains below 6x and the average in-service date is in the first quarter of 2028. She added that the company’s three largest projects—representing more than half of the backlog—remain on time and on budget.
President Dax Sanders said Kinder Morgan continues to see incremental natural gas project opportunities, including projects under development serving more than 10 Bcf per day of power-generation demand and more than 3 Bcf per day in the LNG sector.
During Q&A, Michels discussed storage as a potential differentiator, saying the company is evaluating expansion opportunities and highlighted its existing storage footprint of “over 700 Bcf.” He said storage can help with both short-term dislocations and long-term operational balancing for large demand centers, and noted Bear Creek storage expansion activity is being worked on but “not yet commercialized.”
Monument acquisition and balance sheet update
Dang said the company agreed to acquire the Monument Pipeline System in Texas for approximately $500 million, calling it a “natural fit” with Kinder Morgan’s network and supported by long-term contracts. She said the company received early termination of HSR review and expects to close the deal by the end of the month.
In response to analyst questions, Dang said the asset has a weighted average contract life of about nine years and is “over 90% utilities and industrials with good credit ratings.” She said it provides access to storage on Kinder Morgan’s system that it previously could not access and includes expansion activity that will require incremental capital after closing, with expansion starting later in 2026. Sital Mody, president of natural gas pipelines, said the system integrates well “on a last mile basis” through Houston into the Corpus corridor, adds “incremental low nitrogen supply,” and connects with the company’s storage footprint in ways that can “unlock certain value that an independent by itself cannot.”
Michels said Kinder Morgan’s leverage improved to net debt-to-adjusted EBITDA of 3.6x at quarter-end, down from 3.8x at the beginning of the year and the lowest level for a Kinder Morgan entity since before the 2014 consolidation transaction. He said leverage is expected to rise slightly by year-end due to higher capital spending and only a partial-year EBITDA contribution from Monument, but is now expected to end 2026 at 3.7x versus a prior budget expectation of 3.8x.
He also said Moody’s upgraded Kinder Morgan to Baa1, bringing the company to the equivalent of BBB+ at all three major rating agencies. Michels added that March Treasury guidance will allow the company to “more fully take advantage of bonus depreciation across all of our assets,” which he said creates near-term cash flow benefits and additional investment capacity.
Segment performance: natural gas leads, terminals remain tight
Sanders said natural gas transport volumes increased 8% year over year, driven primarily by higher LNG feed gas deliveries on Tennessee Gas Pipeline. Natural gas gathering volumes rose 15%, with the largest impact from the Haynesville system, and winter weather also contributed to higher volumes.
In products pipelines, Sanders said refined product volumes declined 2% year over year and crude and condensate volumes fell 12%, though he attributed more than the entire crude decline to the Double H Pipeline being removed from service for NGL conversion in the third quarter of 2025. Excluding Double H, crude and condensate volumes were up 2% year over year. Michels added that the products segment benefited from improved commodity pricing and the recovery of retroactive rate increases booked after a favorable court decision.
In terminals, Sanders said liquids lease capacity remained high at nearly 94%, with tanks available for use about 99% utilized at key hubs on the Houston Ship Channel and at Carteret. He also said the Jones Act tanker fleet is “exceptionally well contracted,” projecting 100% leased through 2026 (assuming options are exercised), 97% through 2027, and 80% through 2028. Michels said terminals results also benefited from higher liquids volumes and rates, storage contract buyouts, and increased bulk volumes.
In CO2, Sanders said net oil production volumes increased 2% year over year, led by a 5% increase at Sacroc. He added that RNG volumes rose 63% due to improved uptime and increased hydrocarbon recovery.
The board declared a quarterly dividend of $0.2975 per share, or $1.19 annualized, which Michels said represents a 2% increase over 2025.
About Kinder Morgan (NYSE:KMI)
Kinder Morgan (NYSE: KMI) is a large energy infrastructure company that owns and operates an extensive network of pipelines and terminals across North America. Its core activities center on the transportation, storage and handling of energy products, including natural gas, natural gas liquids (NGLs), crude oil, refined petroleum products and carbon dioxide. The company’s assets include long-haul and gathering pipelines, storage facilities, and multi-modal terminals that serve producers, refiners, utilities and industrial customers.
Kinder Morgan’s operations deliver midstream services such as pipeline transportation, terminaling, storage and related logistics and maintenance.
