Kinder Morgan: Navigating Quarterly Challenges While Staying Bullish on Natural Gas Demand

Kinder Morgan's Optimistic Outlook on Natural Gas

U.S. pipeline operator Kinder Morgan remains bullish on the growth in natural gas demand, particularly driven by AI and data centers, despite narrowly missing Wall Street's quarterly profit expectations.

The company is moving forward with the Trident Intrastate pipeline project, a significant 216-mile pipeline that will provide approximately 1.5 billion cubic feet per day (bcfd) of capacity from Katy, Texas, to the liquefied natural gas and industrial corridor near Port Arthur. This project was announced shortly after President Donald Trump lifted the moratorium on new LNG export permits, with an expected service start in the first quarter of 2027.

Financial Performance

Despite the positive outlook, Kinder Morgan's fourth-quarter revenue dipped to $3.99 billion, down from $4.04 billion the previous year. This decline was attributed to a 5% decrease in crude and condensate volumes transported through its pipelines. The company's adjusted profit was 32 cents per share, slightly below analysts’ predictions of 33 cents.

Future Growth Potential

CEO Kim Dang stated that the overall growth estimate for the natural gas business is about 28 bcfd from now until 2030, driven by LNG exports to Mexico and industrial growth. Analyst Nick Hummel emphasized Kinder Morgan's extensive pipeline network, positioning it well to leverage the increasing demand for natural gas.

The company also anticipates engaging in growth opportunities related to the $500 billion private sector investment announced by President Trump to enhance infrastructure for AI. An executive noted the competitive landscape, saying, "There's a lot of folks that are going to be chasing (that) opportunity."

Market Reaction

Following the announcement, Kinder Morgan's shares rose by 1.5% in after-hours trading, reflecting investor confidence in the company's strategic direction despite recent challenges.