Kinder Morgan, pipeline operators benefit from strong natgas demand
Kinder Morgan posted a 24% rise in 2Q profit on Wednesday, as higher volumes of natural gas were transported through its pipelines and demand for the company's infrastructure rose.
Pipeline operators such as Kinder Morgan are benefiting from an increase in demand for natgas, primarily driven by LNG exports as well as rising electricity needs.
The United States was the largest exporter of LNG in 2024, and exports of the superchilled gas are expected to increase even further, as new terminals come online after President Donald Trump lifted a pause on new permits in January.
Kinder Morgan has long-term contracts to move 8 Bft3d of natural gas to LNG facilities and expects to move 12 Bft3d by 2028.
"With historic growing natural gas demand forecasts, a positive federal regulatory environment, and highly supportive federal permitting agencies, the future for our company is very bright," said Executive Chairman Richard Kinder.
"We are also actively pursuing well over 5 Bft3d of opportunities to serve the natural gas power generation sector," Kinder added.
Roughly 50% of the company's $9.3-B project backlog is dedicated to projects supporting power generation.
Kinder Morgan's results come as the energy industry braces for the impact of Trump's tariffs on most imports, which the company said poses "some challenges". It expects tariffs to impact only 1% of the existing project costs.
The company, which moves roughly 40% of the country's total natural gas output, said it transported about 44,585 billion British thermal units per day (Btu) of natgas in the reported quarter, compared with 43,123 billion Btu last year.
Total delivery volumes, which includes refined products such as jet fuel and diesel fuel, also rose over 2% to 2.21 MMbpd.
The Houston, Texas (U.S.)-based company's net income came in at $715 MM, or $0.32 per share, for the second quarter, compared with $575 MM, or $0.26 per share, last year.
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