Kinder Morgan (KMI) reported record-setting third-quarter results and a surge in its project backlog, which reached an all-time high of $14.4 billion. Driven by growing demand for natural gas across the U.S., the energy infrastructure giant added $5.4 billion in new project approvals during the quarter — one of the largest single-quarter backlog expansions in the company’s history.
Key Takeaways
- Kinder Morgan (KMI) increased its project backlog from $9.6 billion to $14.4 billion in Q3, fueled by $5.4 billion in major natural gas additions.
- The company now expects full-year adjusted EBITDA to beat budget by more than 6%. Adjusted EPS is expected to exceed budget by more than 13%.
- KMI approved two major joint venture natural gas projects: The Southeast Connector and the Permian Link pipeline.
Record Backlog Expansion Powered by Natural Gas Demand
The highlight of Kinder Morgan’s third-quarter update for investors is the dramatic jump in its project backlog, which surged by $4.7 billion net after placing $700 million of completed projects into service.
Management projects that the $14.4 billion backlog will generate $2.5 billion in additional EBITDA upon completion. This will bring the company’s total corporate adjusted EBITDA into the $11.5 billion to $12 billion range. This backlog expansion builds directly on the broader midstream trend of scaling up natural gas infrastructure to meet escalating demand from LNG exports, electricity needs, and industrial growth.
Two landmark joint-venture infrastructure commitments account for $4.7 billion of KMI’s share in new additions. This includes SNG’s Southeast Connector and NGPL’s Permian Link. Supported by 20-year take-or-pay contracts with creditworthy counterparties, these assets underline the durability of long-term natural gas demand.
Strategic JV Projects Target Power & Hyperscaler Load
The Southeast Connector represents a $3.1 billion net investment for KMI designed to transport 2.6 billion cubic feet per day (Bcf/d) of natural gas into the Southeast, with potential scalability to 3.5 Bcf/d. The project targets massive regional power needs, where interconnection requests for large loads exceed 200 gigawatts. This represents up to 8 Bcf/day of potential natural gas demand.
Meanwhile, the 2.8-Bcf/d Permian Link moves low-cost Permian Basin gas north to supply growing power demand in the Texas Panhandle. Notably, the project is backed by a 20-year contract with an A-rated hyperscaler, providing stable cash flows alongside future upsizing options through added compression, the firm said in a statement.
Both projects will come online between 2030 and 2032, providing meaningful visibility to future cash flow growth.
Guidance Outperformance & Capital Flexibility
On the back of strong year-to-date execution, KMI raised full-year expectations. It now anticipates full-year adjusted EBITDA to top budget by more than 6% (up from more than 5% at Q2). The adjusted EPS is expected to beat budget by over 13%. Third-quarter adjusted EBITDA and EPS came in 6% and 15% ahead of internal budget estimates, respectively.
Additionally, KMI declared a quarterly dividend of $0.2975 per share ($1.19 annualized), reflecting a 2% increase over 2025.
Ending the quarter at approximately 3.5x leverage — the lower end of its targeted range — and generating roughly $3 billion in annual cash flow available for expansion CapEx, Kinder Morgan remains uniquely positioned to fund its record $14.4 billion growth backlog while maintaining strong balance sheet flexibility.
KMI is a holding in the Alerian Energy Infrastructure ETF (ENFR ). ENFR is based on the Alerian Midstream Energy Select Index, a composite of North American midstream energy infrastructure companies.
Companies primarily focused on natural gas pipeline transportation represent 36.0% of the index by weighting as of October 21. Additionally, companies that gather and process natural gas make up 27.6% of the index.
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