Kinder Morgan (KMI) Q3 2026 Earnings Call: Q&A Summary

Q: Theresa Chen with Barclays asked about progress on customer commitments for the TGP 219 South project, its ultimate size and scope, and how TGP will play a role in serving incremental demand.

A: Sital Mody stated that the nonbinding open season saw over 2 Bcf of interest, and the project scope will depend on final customer signings, with estimated CapEx around $1.5 billion.

Q: Theresa Chen with Barclays asked about the realistic upside beyond the $3.1 billion net to KMI for the Southeast Connector.

A: Sital Mody explained that they are working through present agreements and credit details, noting the project can be scaled up to 3.5 Bcf. Kimberly Dang added that signed commitments support going forward with the FID today while others may come in later to scale the project.

Q: Julien Dumoulin-Smith with Jefferies asked about the size, scope, and timeliness of the middle system opportunity discussed in the prior quarter.

A: Sital Mody answered that several power projects are evaluating capacity and timing on the 2019 South project, requiring them to sanction parts of the project to accommodate immediate demand while creatively thinking about broader scope.

Q: Julien Dumoulin-Smith with Jefferies asked how the $10 billion opportunity set changes after adding $5 billion this quarter and if Southeast Connector and Permian Link are conversions from the shadow backlog.

A: Kimberly Dang responded that substantial shadow backlog remains and adding these big projects creates bottlenecks in other places that will lead to more projects, supported by very strong industry fundamentals.

Q: Julien Dumoulin-Smith with Jefferies asked how Southeast Connector fits into the broader permitting reform regime.

A: Kimberly Dang stated they are comfortable with the current permitting regime and have had great success working with FERC. She also noted that the permitting bill in Congress is good and would be very helpful if passed.

Q: Jeremy Tonet with JPMorgan asked if there will be other projects of similar size to the ones announced and how to think about run rate CapEx.

A: Kimberly Dang stated it is hard to project exact incoming projects, but Sital Mody discussed another $1.5 billion project, and run rate CapEx is expected to be around $4 billion-ish for the next few years.

Q: Jeremy Tonet with JPMorgan asked for thoughts on modeling 2027 EBITDA given onetime items and project timing.

A: David Michels noted they are avoiding previewing 2027 guidance and that onetime items this year are unlikely to repeat. Kimberly Dang added that only 30% of contracted EBITDA from backlog comes online in 2027, making it a difficult year to replicate, but long-term growth over 3 to 5 years remains strong.

Q: Praneeth Satish with Wells Fargo asked if the $1.5 billion CapEx estimate for TGP 219 South gets to a 2 Bcf per day project or is based on the 500 per day open season.

A: David Michels answered that it ultimately depends on shipper receipt deliveries and will be adjusted accordingly with incremental volume, with the initial focus on a brownfield component.

Q: Praneeth Satish with Wells Fargo asked about the risk of overbuilding in the Permian given Permian Link and recontracting risks for older pipes.

A: An unnamed executive stated that intrastate systems like Permian Highway and GCX are in the heart of developing demand centers, driven by power demand and significant incremental LNG demand.

Q: Brandon Bingham with Scotia Bank asked how the Permian and Haynesville basins will play out in the fight for U.S. Gulf Coast capacity.

A: David Michels stated they believe it will be an all of the above approach, noting significant demand growth that requires more than those basins to satisfy.

Q: Manav Gupta with UBS asked for an update on Phase I and Phase II of Trident and how it helps industrial companies and LNG producers.

A: Kimberly Dang stated that Trident is on time and on budget for shipping delivery in February of next year. Sital Mody added that they saw an industrial and power corridor developing around Trident, giving them the ability to serve the Texas and Louisiana Gulf Coast.

Q: Manav Gupta with UBS asked about the growing Florida gas market and the next phase of expansion at FGT.

A: Sital Mody noted strong demand in Florida, mentioning FGT has sanctioned a few projects and is in discussions for future expansions.

Q: Jean Ann Salisbury with Bank of America asked if the anchor hyperscaler of Permian Link will be online prior to the project start and if timing is linked.

A: David Michels stated they are trying to accommodate multiple customers, noting the anchor tenant drives the need for speed and that length of storage and flexibility are key differentiators.

Q: Jean Ann Salisbury with Bank of America asked if substantially all gas feeding the Southeast corridor will originate from Appalachia.

A: David Michels explained that they have access to multiple pipeline corridors including Columbia Gas, Tetco, and others, allowing multiple basins to serve the takeoff point.

Q: Brandon Bingham with Scotia Bank asked about Kinder Morgan's capture rate of long-dated total gas demand.

A: Kimberly Dang noted that they move about 40% of the gas in the U.S. market, 50% in Mexico, 40% of LNG, and 45% of power demand across the South.

Q: Keith Stanley with Wolfe Research asked if the SEC projects sanctioned include the Nashville area extension and the phasing for SEC and Permian Link.

A: Kimberly Dang confirmed SEC includes the greenfield line, and stated that SEC comes on over 3 years in 2030, 2031, and 2032.

Q: Keith Stanley with Wolfe Research asked how risk sharing works in the Western Gateway JV for cost overruns or delays.

A: Kimberly Dang stated they are approaching the project prudently regarding capital spending and confirmed they have certain cost protections against cost overruns.

Q: John Mackay with Goldman Sachs asked if customer tone has changed regarding broader contracting activity over the last couple of months.

A: David Michels stated they have not seen a change, and customers continue to engage and look for opportunities, particularly regarding storage assets to handle market volatility.

Q: John Mackay with Goldman Sachs asked about customer willingness to take higher implied rates given rising costs.

A: Kimberly Dang explained that cost increases are a function of steel, pipe, and compression costs, but they have not seen customer pushback on return thresholds.

Q: Spiro Dounis with Citi asked about project timing and growth filling in for 2029 and 2030.

A: Kimberly Dang stated that South System 4 coming online in late 2028 and 2029, along with MSX phase two, will drive growth, and the $14.4 billion backlog with a 5.7x multiple brings $2.5 billion of cash flow.

Q: Spiro Dounis with Citi asked about prospects for pipeline moves into Arizona to meet utility and data center needs.

A: David Michels noted they see power demand and traditional coal plant conversions as opportunities on the western side, but it is too early to comment on specifics.

Q: Gabriel Moreen with Mizuho asked if higher crude oil curves put CO2 expansions back into play and about inorganic RNG opportunities.

A: Anthony Ashley stated that EOR projects take time to develop and curves remain backwardated, requiring higher returns. Regarding RNG, he noted they are aware of third-party processes but will be careful stepping into a bigger role.

Q: Gabriel Moreen with Mizuho asked about capital investment plans in the Bakken.

A: Anthony Ashley stated they have invested significant capital there and are well-positioned with the necessary infrastructure.

Q: Zackery Van Everen with TH Research asked if projects are contingent on customers signing supply agreements with producers.

A: An unnamed executive stated the answer is no, they do not do anything contingent, and customers make their own judgments on the macro environment.

Q: Jason Gabelman with TD Cowen asked if Permian Link required a higher IRR due to perceived higher risk with a single anchor shipper.

A: Kimberly Dang explained they approach projects the same way, noting flexibility in rates depending on whether customers share cost risk, and added that Permian Link can be upsized with compression for higher returns.

Q: Jason Gabelman with TD Cowen asked if there is commercial value for controlling gas upstream in the Marcellus.

A: An unnamed executive stated they stick to what they do best, which is building large-scale pipeline infrastructure, and collaborate with established customers for upstream operations.

Q: Harry Mateer with Barclays asked how KMI plans to balance contributing capital to Southeast Connector and Permian Link JVs versus using balance sheet capacity.

A: Kimberly Dang stated it will be a combination of JV cash flows and debt maintaining existing ratings, alongside equity contributions, with full flexibility for KMI to fund 100% of CapEx if needed.