Upbeat on Natural Gas, Kinder Morgan Highlights Pipeline Project

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Expecting a recovery in natural gas markets, Kinder Morgan Incorporated (NYSE:KMI) (KMI) (Houston, Texas) announced a natural gas pipeline project on Thursday.

The company announced the Trident Intrastate Pipeline Project, an approximately 216-mile pipeline underpinned by long-term contracts that will transport natural gas from Katy, Texas, to the liquefied natural gas (LNG) and industrial corridor near Port Arthur, Texas, said Kinder Morgan Chief Executive Officer Kim Dang. Subscribers can click here for the related project reports.

Kinder Morgan said it expected a recovery in natural gas markets, led in part by increased LNG exports.

"For several quarters now, we have pointed to expected significant new natural gas demand for LNG, power plants and emerging opportunities such as artificial intelligence operations, cryptocurrency mining, data centers and industrial re-shoring," said Executive Chairman Richard Kinder. "These expectations are being realized."

Energy companies had struggled under the lower-for-longer cycle for commodity prices last year, with U.S. natural gas prices in particular suffering from lower demand. Both Halliburton and SLB (NYSE:SLB) (Houston), formerly Schlumberger, already posted poor performances for their operations in North America.

Though last year was sluggish, Kinder Morgan said in its fourth-quarter earnings report Thursday that much of the gains made during the three-month period came from its natural gas pipeline, products and terminals division. Fourth-quarter revenue of $3.9 billion was 1.2% below year-ago levels, however.

The company reported fourth-quarter net income of $667 million, compared with $594 million in fourth-quarter 2023.

However, "natural gas gathering volumes were down 7% from the fourth quarter of 2023, primarily from our Haynesville and Bakken gathering systems due to lower commodity prices," said Kinder Morgan President Tom Martin.

Demand may be recovering, however, on the back of cold weather in North America. More volumes will be needed, meanwhile, to satisfy LNG exports, which are on pace to increase by 16% from year-ago levels. The LNG market may be buoyed even further by President Donald Trump's decision to reverse the pause enacted by his predecessor for new export terminals.

There are eight LNG export terminals in the U.S., helping to establish the country as the world leader in deliveries of the super-cooled gas. Several new terminals can be expected over the next few years.

Meanwhile, the Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, expects higher prices too, jumping from the 2024 average of $2.20 per million British thermal units for the U.S. benchmark Henry Hub to $3.10 this year, levels that should help boost finances for major energy companies like Kinder Morgan.

Kinder Morgan has been busy in natural gas markets and is set to get even busier. Through a subsidiary, Hiland Partners Holdings LLC, Kinder Morgan earlier this month agreed to spend $640 million to purchase gas infrastructure systems in the Bakken shale patch in North Dakota from Outrigger Energy II LLC (Denver, Colorado). For more on the acquisition, see January 14, 2024, article - Kinder Morgan Builds Up Bakken Footprint.

Assets set to be acquired from Outrigger include a processing facility with a design capacity of 270 million cubic feet per day (MMcf/d) and a 104-mile gas-gathering pipeline with a capacity of 350 MMcf/d.

On infrastructure, the company said it secured binding commitments for its Mississippi Crossing Project, a 206-mile line stretching from Mississippi to Alabama and designed for 2.1 billion cubic feet per day (Bcf/d) in natural gas. Steered by a subsidiary, Tennessee Gas Pipeline Company, the line could be in service by 2028. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can learn more by viewing the related project reports.

Looking to full-year 2025, Kinder Morgan said it budgeted net income attributable to the company of $2.8 billion, up 8% from 2024. It assumes that West Texas Intermediate (WTI), the U.S. benchmark for the price of oil, will average $68 per barrel this year. Henry Hub, the benchmark for natural gas, was budgeted at $3 per million British thermal units (MMBtu).

WTI started the trading day Thursday at $75.90 per barrel. Henry Hub traded at $4 per MMBtu.

Subscribers can click here for the project reports mentioned in this article and click here for the related plant profiles.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).