Kinder Morgan Raises 2026 Outlook as Gas Project Backlog Tops $9.6 Billion

Kinder Morgan raised its 2026 earnings outlook after placing several major natural gas expansion projects into service while advancing a $9.6 billion project backlog dominated by gas infrastructure.

(P&GJ) — Kinder Morgan raised its 2026 earnings outlook after reporting record second-quarter financial results, citing continued demand for natural gas infrastructure, several major pipeline expansions entering service and a $9.6 billion capital project backlog that remains heavily focused on natural gas.

The company now expects full-year Adjusted EBITDA to finish more than 5% above budget and Adjusted EPS to exceed its original forecast by more than 12%. Kinder Morgan also expects to end the year with a net debt-to-Adjusted EBITDA ratio of 3.6x, an improvement from its original guidance.

During the second quarter, Kinder Morgan placed approximately $660 million (company share) of expansion projects into service, including:

• the Gulf Coast Express expansion,
• Tennessee Gas Pipeline's Cumberland Project, and
• the Hiland Express conversion, which repurposed the former Double H Pipeline from crude oil service to natural gas liquids transportation.

The company said those projects contributed to a backlog totaling $9.6 billion at the end of the quarter. Approximately 92% of that backlog is tied to natural gas projects, while more than 60% supports power generation and local distribution company demand. Kinder Morgan's board also granted contingent approval for nearly $400 million in additional projects that have not yet entered the backlog.

Executive Chairman Richard Kinder said demand for new natural gas infrastructure continues to strengthen as LNG exports, electricity demand and industrial growth drive additional investment opportunities.

"Demand for natural gas infrastructure continues to grow," Kinder said. "Increasing LNG exports, rising power demand and industrial expansion make our existing highly utilized assets more valuable and create significant opportunities for investment across our footprint."

Chief Executive Officer Kim Dang said Kinder Morgan generated approximately $2 billion in operating cash flow and $1 billion in free cash flow during the quarter while funding expansion projects internally and maintaining what the company described as a healthy balance sheet.

"We also achieved very strong results from capital expansion project execution this quarter," Dang said, noting the company brought several major revenue-generating projects into service.

Financially, Kinder Morgan reported second-quarter net income attributable to shareholders of $867 million, up from $715 million a year earlier. Adjusted EBITDA increased 12% to $2.2 billion, while earnings per share rose 22% to 39 cents. Adjusted EPS increased 32% year over year to 37 cents.

Kinder Morgan also provided updates on several major natural gas pipeline projects currently under development, many of which are awaiting federal approvals.

The company said it expects the Federal Energy Regulatory Commission (FERC) to issue certificate orders by the end of July for the South System Expansion 4 (SSE4) and Mississippi Crossing (MSX) projects following the release of a final environmental impact statement in June.

The approximately $3.5 billion SSE4 project (Kinder Morgan share, including Elba Express, approximately $1.8 billion) is designed to add about 1.3 Bcf/d of capacity on Southern Natural Gas' South Main Line. The first phase is expected to enter service in the fourth quarter of 2028, with the second phase following in the fourth quarter of 2029, pending regulatory approvals.

Kinder Morgan also expects the approximately $1.7 billion Mississippi Crossing project to begin service as early as the second quarter of 2028, subject to permitting.

The company recently filed an application with FERC for its South Texas Enhancement Project, a roughly $90 million expansion that would provide additional firm transportation capacity to South Texas and Mexico markets. The project includes approximately 1.7 miles of new pipeline, an overpressure protection facility and a new compressor station, with an anticipated in-service date during the second quarter of 2028.

Kinder Morgan's Natural Gas Pipeline Company of America (NGPL) is also preparing to file a FERC application for the approximately $200 million Amarillo Expansion, which would provide up to 550,000 Dth/d of firm transportation capacity to meet growing demand in the Texas Panhandle, including new data center development. The project is fully subscribed under long-term contracts and is targeted for service in the third quarter of 2028.

Among projects completed during the quarter, Tennessee Gas Pipeline placed its $235 million Cumberland Project into service in May. The 32-mile, 30-inch pipeline lateral delivers approximately 245,000 Dth/d of natural gas to the Tennessee Valley Authority's new gas-fired power plant in Stewart County, Tennessee.

Kinder Morgan also completed the Hiland Express Pipeline conversion, repurposing the former Double H crude oil pipeline to transport natural gas liquids from the Williston Basin to key market hubs.

In June, the company placed the Gulf Coast Express expansion into service, increasing transportation capacity by approximately 570 MMcf/d from the Permian Basin to South Texas and bringing the system's total capacity to about 2.59 Bcf/d.

Beyond its natural gas business, Kinder Morgan said it continues advancing the proposed Western Gateway Pipeline with Phillips 66. The refined products project would connect refinery supply from the Midwest and Gulf Coast to markets in Phoenix, California and Las Vegas, subject to commercial agreements, permitting and final investment approvals.

The company is also expanding infrastructure at its Houston Ship Channel terminals, including new refined products pipeline connections, storage enhancements and export terminal improvements backed by long-term customer commitments. The projects are expected to enter service between 2027 and 2028.