Earnings
Kinder Morgan's project backlog jumps $4.7 billion to $14.4 billion as it commits to a $4.2 billion Permian gas line for a hyperscaler
The pipeline operator lifted third-quarter adjusted EPS 21% and now expects 2026 adjusted EPS more than 13% above budget, while free cash flow after dividends turned more negative.
HedgeWeekly News Desk ·
Kinder Morgan's expansion project backlog rose to $14.4 billion at the end of the third quarter, up $4.7 billion from three months earlier, after the company added $5.4 billion of new projects and placed about $700 million in service, according to results filed with the SEC on October 21. Natural gas projects account for $13.2 billion of the total, the largest gas backlog in the company's history.
The biggest addition is Permian Link, a roughly 434-mile Natural Gas Pipeline Company of America line designed to carry about 2.8 billion cubic feet a day. It is expected to cost about $4.2 billion, with Kinder Morgan's share around $1.6 billion, and is backed by long-term take-or-pay contracts with an A-rated hyperscaler that will use the gas for new power generation. Service is targeted for the third quarter of 2030, subject to permits.
Quarterly results also improved. Net income attributable to Kinder Morgan rose 22% to $764 million, adjusted EPS climbed 21% to $0.35 and adjusted EBITDA increased 9% to $2.18 billion. Gas transport volumes rose 3% and gathering volumes 14%. The company now expects full-year adjusted EBITDA more than 6% above its $8.6 billion budget and adjusted EPS more than 13% above its $1.36 budget, with year-end leverage of 3.6 times. It declared a quarterly dividend of $0.2975 a share, up 2%.
For income and infrastructure investors, the filing shows AI-driven power demand moving from talk into signed, long-dated gas contracts: about $13.7 billion of the backlog is described as stable, mainly take-or-pay cash flow, at an expected multiple of about 5.7 times first-full-year project EBITDA. The trade-off is near-term cash: free cash flow fell to $545 million from $621 million a year earlier, leaving a $120 million shortfall after dividends, versus $33 million a year ago. How Kinder Morgan funds its growing build-out while keeping leverage near 3.5 times is the metric to track.