Kinder Morgan Inc Q2 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Theresa Chen, CFA - Barclays Services Corp - Analyst : Good afternoon and congratulations on the progress in the commercial backlog under what seems to be fierce competition. Do you think the commercial landscape has changed with these demand tailwinds on a structural basis? And what do you think has allowed Kinder to win many of these projects? And what kind of learnings can you share that might shape your strategy going forward on the heels of these commercial wins?

Question: Theresa Chen, CFA - Barclays Services Corp - Analyst : Thank you. And looking forward on additional projects to come potentially in the backlog, as far as the expansion of Westwood from the Permian, what is the progress on building additional natural gas infrastructure on that front? And what would something like copper state connector amount to in terms of cost economics as well as the potential for subsequent brownfield expansions down the line?

Question: Theresa Chen, CFA - Barclays Services Corp - Analyst : Very helpful. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 16, 2025 / 8:30PM, KMI.N - Q2 2025 Kinder Morgan Inc Earnings Call

Question: Michael Blum - Wells Fargo Securities LLC - Analyst : Thanks. Good afternoon, everybody. How do -- capital allocation question really between gas pipelines and gathering investments. You talked about this big opportunity set on the gas pipeline side. Your average multiple is between 5 and 6 times. So how do we think about a $500 million investment in KinderHawk? Does that mean this change on investment is generating an even higher return than that given the higher risk profile? Just kind of think through all that.

Question: Michael Blum - Wells Fargo Securities LLC - Analyst : Okay. Great. Thanks for that. And then I just want to see an update how you're thinking about behind-the-meter opportunities. I know you've talked about maybe having something in place with partners or -- so wanted to see where that stands and how meaningful a driver of future CapEx that could be? Thanks.

Question: John Mackay - Goldman Sachs Group Inc - Analyst : Hey, everyone. Thank you for the time. I'm just going to pick up on this project thread, of course. Maybe just talking about the backlog on the gas side. You mentioned about 50% power utilities at this point. That's arguably a larger share than power has and kind of the go-forward gas demand growth we're looking at relative to LNG, I suppose. Maybe could you just talk a little bit about how you'd expect that 50% to kind of trend from here? Would incremental projects on the horizon, maybe putting aside copper state for a second, start leaning more LNG, I mean we need to wait more FIDs. Maybe just frame up like how that mix looks over the next couple of quarters or years?

Question: John Mackay - Goldman Sachs Group Inc - Analyst : That's helpful. That's interesting. And maybe just for my next question, you come on the new tax rules should open up some incremental cash flow for you, guys. I guess just wondering if you can kind of put a bit of a number around the incremental cash kind of looking forward. And then on a related point, does it change how you think about your ability to go after projects your kind of implicit cost of capital? I know you're kind of defending the return profile you want to get, but does an incremental tax framework change that at all? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 16, 2025 / 8:30PM, KMI.N - Q2 2025 Kinder Morgan Inc Earnings Call

Question: Jeremy Tonet - JPMorgan Chase & Co - Analyst : Hi, good afternoon.

Question: Jeremy Tonet - JPMorgan Chase & Co - Analyst : Want to turn to Arkansas, if I could. We've seen recent reports of hyperscaler activity there and I want to double click on your Texas, Arkansas Power project. Noticed a binding open season there and given the 400 already prearranged there, it seems like that could support 2 gigs, very nice size for the project right there. But do you expect more to come along at that point? Do you see the possibility for more demand beyond that? Or really, you kind of have a fit-for-purpose pipe rate here and ready to go? And anything you could provide as far as incremental details there would be helpful.

Question: Jeremy Tonet - JPMorgan Chase & Co - Analyst : Right, right. Understood. Just the size of it there. It could support some nice power for the utility and not for Kinder, understood there. But I'll leave that there. I'm just wondering, post the Georgia Power IRP filing here, does this impact, I think, the opportunity set as you see it in the Southeast? Could there be upside I guess, to your current expansion plan scope to make those expansions larger?

Question: Manav Gupta - UBS AG - Analyst : Good afternoon. It looks like you have increased the size of Trident from 1.5 to 2 Bcf. And as I remember, you did this with Mississippi Crossings also the pipe got announced at 1.5 and got scaled up very quickly to 2.1. I'm trying to understand what's driving this incremental demand. You come in, you announce a project and very quickly, you're able to size it up. So help us talk through those dynamics a little.

Question: Manav Gupta - UBS AG - Analyst : Perfect. And it looks like the backlog also benefited from the NGPL new projects. Can you talk about -- a little more about these projects? It looks like the power plant-related projects. So if you could help us understand that this incremental projects from NGPL that added to the backlog in this quarter? Thank you.

Question: Jean Ann Salisbury - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hi. I just wanted to follow up to Kim's answer to John's question earlier about when LNG projects sign up for their gas pipeline needs vis-a-vis when they get sanctioned. You've obviously had a ton of LNG contracting activity over the last quarter. I think you're probably still to come this sort of large wave of sanctioning. So I guess my question is if you believe that those projects have kind of already signed up for the gas takeaway that they would need or if that's basically coming as the sanction of the projects over the next year?

Question: Jean Ann Salisbury - Bofa Merrill Lynch Asset Holdings Inc - Analyst : That's very clear. Thank you. And then as a follow-up, I wanted to ask about some of the dynamics of Permian gas pipelines. We're very tight on egress capacity today, but something like 5 Bcf/d comes online next year, including your own GCX expansion. And I think there are a few other possible projects out of the Permian that seem to be progressing. So I guess the question is, if there's some concern that this could put pressure on rates for Kinder Morgan later in the decade if some of those initial pipeline contracts begin to roll off, can you just kind of talk about how you would frame that risk of Permian overbuild?

Question: Zack Van Everen - TPH&Co. - Analyst : Hi, guys. Thanks for taking my question. Just going back to the Haynesville expansion real quick. Can you guys speak to the volume or capacity that you're adding there? And then is this mainly from your larger customers? Or are you seeing demand from some of the privates that feed your system as well?

Question: Zack Van Everen - TPH&Co. - Analyst : Got you. That makes sense. And then maybe one on the LNG side. I know Tennessee Gas feeds the Plaquemines facility and VG continues to talk about potential further expansion at that site. If they were to do that, does Tennessee Gas have the ability to expand more to feed LNG in that area?

Question: Jason Gabelman - TD Cowen - Analyst : Hey, good afternoon. Thanks for taking my questions. The first one I wanted to ask was on the Bakken, given the Outrigger deal has been closed for quite some time. I think you are at least six months and Double H is close to ramping up here on the conversion. So just wondering what the strategy is on gaining volumes there and kind of securing potentially higher rates that that region has to offer versus other basins.

Question: Jason Gabelman - TD Cowen - Analyst : Okay. And then just maybe longer-term question. You've talked a lot about the LNG growth on the US Gulf Coast and the boom it's been for your business. There is some concern that after this wave of capacity, there's going to be a potential oversupply in the market. And I wonder if you're -- in your conversations with LNG customers, hearing anything around a potential slowdown in contracting or need for additional piping into future plants after this wave of capacity comes online or if your LNG customers really expect new builds to continue at pace through the decade and into the 2030s?

Question: Harry Mateer - Barclays Services Corp - Analyst : Good afternoon. David, earlier you made the point that most of the expected reconciliation bill benefits come from the treatment on depreciation, which I think makes sense is it doesn't look like the 30% of EBIT deductibility for interest was a material constraint for KMI. But having said that, does the expanded interest deductibility cause you to rethink anything on the financing your balance sheet side moving forward to take greater advantage of this tax benefits on interest expense down the road?

Question: Harry Mateer - Barclays Services Corp - Analyst : Got it. All right. Thank you.