Rising natural gas demand sparks infrastructure boom! Kinder Morgan (KMI.US) invests $4.7 billion in two major pipeline projects

Jintong Finance APP reported that the U.S. pipeline operator Kinder Morgan (KMI.US) announced on Wednesday that it has approved a total investment of 4.7 billion USD in two major natural gas pipeline joint venture projects. These investments will be undertaken according to the company's respective shares, and the investment decisions are based on the continuously growing demand from power plants, data centers, and liquefied natural gas (LNG) exporters. These projects have pushed Kinder Morgan’s natural gas project backlog to a record high, highlighting the industry's efforts to expand infrastructure to meet new demand.

Reportedly, Kinder Morgan will invest about 3.1 billion USD in the Southern Natural Gas Southeast Connector project and 1.6 billion USD in Natural Gas Pipeline Company of America (NGPL)’s Permian Link project. The Southeast Connector project will use approximately 470 miles (about 756 kilometers) of new pipeline to deliver up to 2.6 billion cubic feet of natural gas per day (Bcf/d) to meet the continuously growing demand in the southeastern U.S. market.

The Permian Link project aims to use around 434 miles (about 698 kilometers) of new pipeline to transport natural gas from the Permian Basin near Pecos County, Texas, to NGPL’s midcontinent U.S. delivery system, with a transportation capacity of about 2.8 billion cubic feet per day (Bcf/d).

Once approved, Kinder Morgan’s total project backlog will rise to 14.4 billion USD, with the natural gas project backlog reaching a record 13.2 billion USD.

Kinder Morgan stated that the Permian Link project will deliver natural gas to a power supplier that provides energy to a hyperscale data center client with investment-grade credit ratings. Company executives indicated that aside from this major hyperscale data center client, the project has also attracted interest from other clients. Permian Link is expected to be operational in the third quarter of 2030, while the Southeast Connector is projected to start phased operation beginning from the fourth quarter of 2030.

Meanwhile, the company’s earnings report released on Wednesday showed third-quarter revenue of 4.53 billion USD, higher than the market consensus of 4.38 billion USD; adjusted earnings per share were 35 cents, also surpassing the market expectation of 32 cents.