Kinder Morgan outlines $14.4B backlog as Southeast Connector targets 2.6 Bcf/d and Permian Link enters service in 2030

• "The third quarter was another good quarter for us with results exceeding both the comparable period in 2025 and our budget for this year... our backlog of U.S. natural gas projects now stands at an all-time record." (Executive Chairman of the Board Richard Kinder)
• "Adjusted EPS increased by 21%, adjusted EBITDA grew by 9%... we ended the quarter at approximately 3.5x debt-to-EBITDA... our project backlog increased from $9.6 billion to $14.4 billion this quarter." (CEO & Director Kimberly Dang)
• "In the $5.4 billion of additions are 2 highly strategic joint venture projects, SNG's Southeast Connector and NGPL's Permian Link... both projects are supported by at least 20-year take-or-pay contracts with creditworthy shippers." (CEO Dang)
• "Transport volumes were up 3%... Natural gas gathering volumes were up 14%... refined product volumes were down 3%... liquids lease capacity remains high at almost 93%... In Q3, we saw 427,000 barrels a day move across our 11 docks... an all-time record." (President Dax Sanders)
• "We're declaring a quarterly dividend of $0.2975 per share... For the third quarter, we generated net income attributable to KMI of $764 million and EPS of $0.34... Adjusted EBITDA grew by 9% to $2.18 billion." (VP & CFO David Michels)

Outlook

• "Before this quarter, most of our EBITDA from our backlog was expected to be online by the end of 2029... With Permian Link and Southeast Connector entering service between 2030 and 2032, we have meaningfully extended the period of high-quality cash flow growth supported by approved projects." (CEO Dang)
• "It's probably going to be around $4 billion-ish for the next few years in terms of the CapEx that we would expect to spend." (CEO Dang)
• "'26, because it has some of these items, is going to be a difficult year to replicate... the growth is not going to be even every single year." (CEO Dang)

Financial Results

• "Our third quarter performance was also ahead of internal expectations with EPS 15% above budget and adjusted EBITDA 6% above our budget." (VP & CFO Michels)
• "Year-to-date, net debt increased $513 million... We generated $5.04 billion of cash flow from operations... We've spent $1.98 billion in dividends... We've spent $3.07 billion in capital... and then the Monument acquisition was approximately $500 million." (VP & CFO Michels)
• "During 2026, we benefited from a handful of large items that may not be recurring... Collectively, these items contribute approximately $225 million to our outperformance in 2026... favorable commodity prices have contributed an additional $175 million versus our budget." (VP & CFO Michels)

Q&A

• Theresa Chen, Barclays: asked about the "219 South" open season and potential sizing; VP & President of Natural Gas Pipelines Sital Mody responded, "over 2 Bcf of interest... If I had to kind of gauge where I see the CapEx landing there, roughly around $1.5 billion."
• Theresa Chen, Barclays: asked about Southeast Connector scaling; VP Mody said, "we can scale this... We have up to 3.5, 3.5 Bcf is plausible," and CEO Dang added, "we have enough signed commitments today to support going forward in FIDing the project."
• Jeremy Tonet, JPMorgan: asked about run-rate CapEx and 2027 framing; CEO Dang said, "it's probably going to be around $4 billion-ish," while VP & CFO Michels said, "we're going to avoid giving -- previewing the 2027 guide for right now."
• Praneeth Satish, Wells Fargo: asked about Permian overbuild and recontracting; VP Mody said, "our focus has been on market pull... there's so much incremental LNG demand that is yet to come."
• Keith Stanley, Wolfe: asked about phasing for Southeast Connector and Permian Link; CEO Dang said, "Permian Link... comes online in 2030... SEC... comes on 2030, 2031 and 2032."
• John Mackay, Goldman Sachs: asked about contracting tone and returns; VP Mody said, "we haven't seen a change," and CEO Dang said, "We have not seen customer pushback... we're still targeting the same return thresholds."

Sentiment Analysis

• "Impressive here" and "Nicely done" characterized analyst tone as slightly positive, while several questions probed execution timing, overbuild risk, and cost inflation (e.g., John Mackay, Goldman Sachs: "perceived kind of slowdown in... contracting activity").
• Management tone was positive in prepared remarks and measured in Q&A, using confidence language including "we are very comfortable" on permitting (CEO Dang) and boundary-setting language including "we're going to avoid... previewing the 2027 guide" (VP & CFO Michels).
• Compared with Q2, management maintained a similar confidence posture on demand-led projects; in Q2, Executive Chairman Kinder said, "we have to get the horses in the corral," while in Q3 he said, "we've got a hell of a lot of those horses in the corral now with the saddles on."

Quarter-over-quarter comparison

• Backlog and project cadence language shifted from expectation to delivery; in Q2, CEO Dang said, "we anticipate... adding significant projects from our over $10 billion opportunity set before year-end," while in Q3 she said, "our project backlog increased from $9.6 billion to $14.4 billion this quarter" and tied it to "20-year take-or-pay contracts."
• Capital-spend framing moved higher; in Q2, CEO Dang discussed "roughly... $3 billion" annual expansion CapEx tied to the then-backlog, while in Q3 she said "around $4 billion-ish" for the next few years.
• Analyst focus remained centered on power/LNG-driven gas infrastructure (Permian Link, 219 South, Southeast buildout), with Q3 adding more detailed scrutiny on scaling, phasing, and JV funding.

Risks and Concerns

• "Some of those items that we experienced this year, it's unlikely that we're going to see those again next year" and "'26... is going to be a difficult year to replicate" highlighted non-recurring tailwinds as a risk to year-ahead comparisons. (VP & CFO Michels; CEO Dang)
• "Steel prices/pipe prices have increased, compression costs have increased" described project cost inflation, while CEO Dang said, "We have not seen customer pushback" and emphasized unchanged return thresholds.
• On Western Gateway execution risk, CEO Dang said, "we're being very prudent about how we're approaching this project" and added, "we do have certain cost protections against cost overruns."

Final Takeaway

Management described Q3 as a record quarter alongside a step-change in sanctioned backlog to $14.4 billion, anchored by Southeast Connector and Permian Link under long-dated take-or-pay contracts, while also signaling a higher multi-year spending cadence and more uneven annual growth timing given the construction schedule and the stated non-recurring tailwinds embedded in 2026 results.

Read the full Earnings Call Transcript

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