Hi Bill,
Kinder up .495 this morning.
Nice revenue numbers exceeding estimates as the EPS was off by a penny. No doubt their major recent acquisition of Outrigger came complete with unforeseen legal expense.
I think as 2025 progresses and Trump sells his energy production plans to those who have an unbalanced trade deficit with us KMI will be a beneficiary of more gas traveling ing their infrastructure that provides 70% of our exports the the global market. The market has cut KMI some slack on a penny short.
Recent articles indicate that even if China balks on energy purchases, Indonesia, Malaysia, and India will fill in the gap.
Kinder Morgan Reports First Quarter 2025 Financial Results
April 16, 2025
Approves Cash Dividend of $0.2925 per share ($1.17 annualized)
Added $900 Million to Project Backlog
Closed $640 Million Outrigger Acquisition
HOUSTON--(BUSINESS WIRE)-- Kinder Morgan, Inc.’s (NYSE: KMI) board of directors today approved a cash dividend of $0.2925 per share for the first quarter ($1.17 annualized), payable on May 15, 2025 to stockholders of record as of the close of business on April 30, 2025. This dividend is a 2% increase over the first quarter of 2024.
KMI is reporting:
- First quarter net income attributable to KMI of $717 million, compared to $746 million in the first quarter of 2024; and Adjusted net income attributable to KMI of $766 million, 1% higher than the first quarter of 2024.
- Adjusted EBITDA of $2,157 million, up 1% versus the first quarter of 2024.
“Obviously we are going through turbulent times, with some voicing fears of an economic downturn. History shows that our company is largely insulated against temporary volatility, due to our time-tested business model structured around long-term take-or-pay, fee-based contracts with credit-worthy customers. As has been the case in past periods of economic instability, our company can be a safe haven during the storm,” said Executive Chairman Richard D. Kinder. “Looking past this temporary turbulence, we see a bright future based on robust market fundamentals combined with regulatory relief and a commitment to expediting energy infrastructure projects at the federal level.”
“The company enjoyed a solid quarter, with very strong operational performance and increased financial contributions from our Natural Gas Pipelines, CO2 and Terminals business segments versus the first quarter of 2024. Our Products Pipelines business segment was down mostly due to a turnaround at our condensate processing facility, which is required once every 10 years,” said Chief Executive Officer Kim Dang.
“We continued to internally fund high-quality capital projects while generating cash flow from operations of $1.2 billion and $0.4 billion in free cash flow (FCF) after capital expenditures. Our balance sheet remains healthy, as we ended the quarter with a Net Debt-to-Adjusted EBITDA ratio of 4.1 times,” continued Dang. “And we continued to grow our presence in the Bakken, closing on a $640 million acquisition of Outrigger Energy II’s gathering and processing system, which is backed by long-term contracts with commitments from major customers in the basin.
“The landscape for natural gas continues to be more and more favorable. First quarter U.S. domestic natural gas production volumes were the highest on record. For the second year in a row, the U.S. set a first quarter demand record as demand grew by 6.8 billion cubic feet per day (Bcf/d) versus the first quarter of 2024. Residential/commercial natural demand and LNG feedgas demand were up 10% and 15%, respectively,” continued Dang.
“Further, our analysis indicates potential demand for U.S. natural gas is projected to grow between 20-28 Bcf/d by the end of the decade. According to Wood Mackenzie, demand for LNG feedgas is projected to more than double over the same period. We currently have long-term contracts to move approximately 7 Bcf/d to LNG facilities and, upon completion of projects under construction, that amount is expected to grow to approximately 11 Bcf/d by the end of 2027. We are also pursuing a substantial amount of additional LNG feedgas opportunities.
“In the natural gas power generation sector, we are actively pursuing well over 5 Bcf/d of opportunities to serve that market. With 66,000 miles of natural gas pipelines connected to all major basins and demand centers, along with over 700 billion cubic feet (Bcf) of working gas storage capacity, we are confident that we will secure our share of additional natural gas infrastructure supporting rising natural gas demand,” said Dang.
“Our project backlog also reflects this strong natural gas demand. At the end of the first quarter of 2025, the backlog stood at $8.8 billion, net of approximately $225 million in projects placed in service, a nearly 8% increase compared to $8.1 billion at the end of the fourth quarter of 2024. Natural gas projects account for approximately 91% of the backlog,” Dang continued. “The largest project added to the backlog is Bridge, an approximately $431 million project designed to provide 325 million cubic feet per day (MMcf/d) of firm transportation capacity to meet growing demand in the state of South Carolina.
“In calculating backlog Project EBITDA multiples, we exclude both the capital and EBITDA from our CO2 enhanced oil recovery projects and our gathering and processing projects, where first-full-year multiples are more favorable but the earnings are more uneven than with our other business segments. We expect the remaining $7.5 billion of projects in the backlog, when realized, to generate an aggregate first-full-year Project EBITDA multiple of approximately 5.9 times.
“Of course there has been a lot of attention on tariffs, particularly those on steel, and how they might impact project economics. At this point, we do not believe that the tariffs will have a significant impact on project economics. We began efforts to mitigate the potential impact early in the quarter by preordering critical project components, negotiating caps on cost increases, and securing domestic steel and mill capacity for our larger projects, which total two-thirds of our project backlog. For these projects, we have locked in the cost of the finished steel pipe and less than 10% is exposed to tariffs.”
2025 Outlook
For 2025, KMI budgeted net income attributable to KMI of $2.8 billion, up 8% versus 2024 and Adjusted EPS of $1.27, up 10% from 2024. KMI expects to declare dividends of $1.17 per share for 2025, a 2% increase from the dividends declared for 2024. The company also budgeted 2025 Adjusted EBITDA of $8.3 billion, up 4% versus 2024, and to end 2025 with a Net Debt-to-Adjusted EBITDA ratio of 3.8 times. These amounts do not include contributions from the Outrigger Energy II acquisition discussed below. We currently expect to exceed budget by at least the contributions from the Outrigger acquisition.
The budget assumes average annual prices for West Texas Intermediate (WTI) crude oil and Henry Hub natural gas of $68 per barrel and $3.00 per million British thermal units (MMBtu), respectively, consistent with the published forward curve available during the company’s annual budget process.
This press release includes Adjusted Net Income Attributable to KMI, Adjusted EPS, Adjusted Segment EBDA, Adjusted EBITDA, Net Debt, FCF and Project EBITDA, all of which are non-GAAP financial measures. For descriptions of these non-GAAP financial measures and reconciliations to the most comparable measures prepared in accordance with generally accepted accounting principles, please see “Non-GAAP Financial Measures” and the tables accompanying our preliminary financial statements.
Overview of Business Segments
“The Natural Gas Pipelines business segment’s improved financial performance in the first quarter of 2025 relative to the first quarter of 2024, excluding certain items, was due primarily to continued higher contributions from both our Texas Intrastate system and Tennessee Gas Pipeline (TGP),” said KMI President Tom Martin.
“Natural gas transport volumes were up 3% compared to the first quarter of 2024 primarily due to LNG and power plant deliveries on TGP. Natural gas gathering volumes were down 6% from the first quarter of 2024, primarily due to our Haynesville gathering system.
“Contributions from the Products Pipelines business segment were down compared to the first quarter of 2024 due to a planned ten-year turnaround at our petroleum condensate processing facility in the Houston Ship Channel as well as lower commodity prices in the first quarter of 2025. Both of these impacts were partially offset by higher transport rates and volumes. Total refined products volumes were up 2%, and crude and condensate volumes were up 4%, compared to the first quarter of 2024,” Martin said.
“Terminals business segment earnings were up compared to the first quarter of 2024. The increase was led by our Jones Act tanker fleet, which benefited from higher rates and remains fully contracted under term charter agreements. This increase was partially offset by lower earnings from coal handling activities in our bulk terminals business, largely due to higher shortfall payments in the prior year period,” continued Martin.
“CO2 business segment earnings, which include Energy Transition Ventures (ETV), were up compared to the first quarter of 2024 on higher renewable natural gas sales volumes, partially offset by lower D3 RIN prices,” said Martin.
Other News
Corporate
- The KMI board announced that KMI President Tom Martin has notified it of his intention to retire, effective January 31, 2026, when he will assume an advisory role to the Board and the Office of the Chairman. In that role, he will apply his tremendous knowledge of the natural gas pipeline sector to help the company execute its substantial backlog of projects. Tom joined KMI in 2003 and held positions of increasing responsibility through his appointment as KMI President in 2023.
- The KMI board has appointed Dax Sanders, President, Products Pipelines, as Executive Vice President, effective August 1, 2025. In that role, Dax will work closely with Tom and will succeed him as KMI President in January. Sanders joined KMI in 2000 and has had various roles in business development, finance, and investor relations, including serving as a Director and Chief Financial Officer for Kinder Morgan Canada Limited. Succeeding Dax as President, Products Pipelines will be Michael Garthwaite, currently Chief Commercial Officer, Products Pipelines, a position he has held since October 2024. Previously, Mike was Chief Commercial Officer for Kinder Morgan Terminals.
Natural Gas Pipelines
- Elba Express Company, LLC (EEC) has executed the precedent agreement needed to proceed with a 71-mile extension of its pipeline system into South Carolina. The approximately $431 million Bridge project is designed to provide 325 MMcf/d of firm transportation capacity for the growing needs of the state and is supported by long term contracts with credit-worthy customers. Assuming the timely receipt of all required permits and approvals, the project is expected to be placed in service in the second quarter of 2030.
- We have secured incremental long-term customer commitments on our South System Expansion 4 (SSE4) project of approximately 100 MMcf/d, resulting in an approximately $140 million increase in capex. Preliminary survey work is nearly complete on the project, which is designed to increase SNG’s South Line capacity by approximately 1.3 Bcf/d. The approximately $3.4 billion project will help meet growing power generation and local distribution company demand in the Southeast. SSE4 will be completed in two phases and is almost entirely comprised of brownfield looping and horsepower compression additions on the SNG and EEC pipeline systems (KM-share approximately $1.8 billion, including EEC). Assuming the timely receipt of all required permits and approvals, KMI expects to place the first phase of the project in service in the fourth quarter of 2028 and the second phase in the fourth quarter of 2029.
- Kinder Morgan Tejas Pipeline LLC has entered into definitive anchor agreements with power providers to support up to a 350 MMcf/d expansion near the Houston area. The approximately $90 million project adds compression, pipeline, and ancillary facilities with a targeted in-service date of the second quarter of 2027 and further demonstrates the interest we are seeing from power markets.
- In February, Hiland Partners Holdings LLC closed on its purchase of a natural gas gathering and processing system in North Dakota from Outrigger Energy II for $640 million. The acquisition included a 270 MMcf/d processing facility and a 104-mile, large-diameter, high-pressure rich gas gathering header pipeline with 350 MMcf/d of capacity connecting supplies from the Williston Basin area to high-demand markets. The system is backed by long-term contracts with commitments from major customers in the basin.
- Preliminary survey work is progressing on KMI’s approximately $1.6 billion Trident Intrastate Pipeline project. The approximately 216-mile project is underpinned by long-term contracts and will provide approximately 1.5 Bcf/d of capacity from Katy, Texas to the LNG and industrial corridor near Port Arthur, Texas. We continue to work with customers on further expansion of the project. Assuming the timely receipt of all required permits and approvals, KMI expects the project to be in service in the first quarter of 2027.
- Construction activities are underway on the fully contracted Gulf Coast Express Pipeline LLC expansion project. The $455 million expansion project (KM-share approximately $161 million) is designed to increase by 570 MMcf/d natural gas deliveries from the Permian Basin to South Texas markets. The project is expected to be in service in mid-2026.
- Preliminary survey work is underway on TGP’s Mississippi Crossing (MSX) project. The approximately $1.7 billion project is designed to transport up to 2.1 Bcf/d of natural gas to Southeast markets through the construction of nearly 206 miles of 42-inch and 36-inch pipeline and three new compressor stations. MSX will originate near Greenville, Mississippi, and connect to the existing TGP system and multiple third-party pipelines to provide critical access to natural gas sourced from multiple supply basins for delivery to Southern Natural Gas (SNG) and Transco near Butler, Alabama. Assuming the timely receipt of all required permits and approvals, the project is expected to be placed in service in November 2028.
- Construction is nearly complete on the second phase of the approximately $700 million Evangeline Pass project, which has an expected in-service date of July 1, 2025. The two-phase project involves modifications and enhancements to portions of the TGP and SNG systems in Mississippi and Louisiana, resulting in the delivery of approximately 2 Bcf/d of natural gas to Venture Global’s Plaquemines LNG facility.
Terminals
- KMI’s latest expansion of its industry-leading renewable diesel and sustainable aviation fuel feedstock storage and logistics offering at its lower Mississippi River hub was placed in service in the first quarter of 2025. The approximately $56 million project at its Geismar River Terminal in Geismar, Louisiana, involved the construction of multiple tanks totaling approximately 250,000 barrels of heated storage capacity, along with various improvements to marine, rail and pipeline infrastructure.
Products Pipelines
- In March 2025, KMI placed its approximately $17 million Florida Jet Fuel Expansion project in service to enhance jet fuel deliveries to the Orlando, Florida market. The project involved modifying the existing Central Florida Pipeline system from Tampa to Orlando and constructing a new 120,000 barrel per day jet fuel tank in Tampa. The expansion creates a continuous jet fuel system that increases pipeline transportation capacity into the Orlando International Airport, providing a faster return-to-service solution following hurricane-related power outages. The project is fully contracted with 10-year commitments from the Orlando airline consortium.
CO2/Energy Transition Ventures
- Autumn Hills RNG was placed in service in March 2025. With the plant’s capacity of 0.8 Bcf of RNG annually, the additional facility increases KMI’s total RNG generation capacity to 6.9 Bcf per year.
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in North America. Access to reliable, affordable energy is a critical component for improving lives around the world. We are committed to providing energy transportation and storage services in a safe, efficient and environmentally responsible manner for the benefit of the people, communities and businesses we serve. We own an interest in or operate approximately 79,000 miles of pipelines, 139 terminals, more than 700 Bcf of working natural gas storage capacity and have renewable natural gas generation capacity of approximately 6.9 Bcf per year. Our pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO2, renewable fuels and other products, and our terminals store and handle various commodities including gasoline, diesel fuel, jet fuel, chemicals, metals, petroleum coke, and ethanol and other renewable fuels and feedstocks. Learn more about our work advancing energy solutions on the lower carbon initiatives page at www.kindermorgan.com. |
