Kinder Morgan commits to build $4.2B natural gas pipeline to supply data center

Kinder Morgan (KMI) climbed 2.1% post-market Wednesday after saying it reached a final investment decision to build a 434-mile pipeline to ship natural gas across West Texas and the Panhandle to help power a data center complex.

The company said the $4.2B Permian Link project—Kinder Morgan's (KMI) share totals ~$1.6B—will be designed to provide 2.8 Bcf/day of gas to an unnamed "A-rated hyperscaler" as a major customer for the network and is supported by long-term, take-or-pay transportation agreements.

The pipeline will capture a "compelling opportunity" by moving cheap Permian Basin gas north to emerging data center clusters in the Panhandle, Kinder Morgan (KMI) CEO Kim Dang said on the company's earnings conference call, according to Bloomberg.

The company also approved the 470-mile Southeast Connector pipeline that will haul as much as 2.6 Bcf/day of gas.

The Permian Link is expected to enter ​service in Q3 2030, while ​Southeast ⁠Connector is expected to start in phases beginning in Q4 2030.

The approvals lifted Kinder Morgan's (KMI) project backlog to $14.4B, including a record $13.2B of natural gas projects.

The announcements came as Kinder Morgan (KMI) reported better-than-expected Q3 adjusted earnings of $0.35/share on revenue of $4.53B, up 9.3% Y/Y.

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