Record Quarter Supports Multi-Billion-Dollar Expansion Program Focused on Natural Gas, LNG, Power Generation and Gulf Coast Infrastructure
Published by Allstream Insiders
Editorial Summary
Kinder Morgan’s Second Quarter 2026 Financial Results, released on July 22, 2026, tell a much bigger story than record earnings. While the company delivered all-time second-quarter highs in net income and Adjusted EBITDA, the most significant takeaway for the energy industry is the continued execution of one of North America’s largest energy infrastructure capital programs.
The company reported a $9.6 billion project backlog, with 92% dedicated to natural gas infrastructure and more than 60% supporting power generation and local distribution company demand. During the quarter, Kinder Morgan placed approximately $660 million, based on Kinder Morgan’s share, of expansion projects into service while continuing to advance several multi-billion-dollar pipeline projects through the federal permitting process.
For EPC contractors, engineering firms, pipeline constructors, inspection companies, manufacturers, automation providers, environmental consultants and industrial service companies, these project announcements provide valuable insight into where engineering, procurement, construction, commissioning and long-term operations opportunities are expected to develop over the next several years.
Kinder Morgan Q2 2026 Project Tracker
| Project | Business Segment | Estimated Project Value | Current Status | Expected In-Service |
|---|---|---|---|---|
| South System Expansion 4 | Natural Gas Pipelines | $3.5 billion Kinder Morgan share: approximately $1.8 billion |
FERC issued a Final Environmental Impact Statement on June 26, 2026. FERC had previously indicated that certificate orders were expected by the end of July 2026. | Phase One: Q4 2028 Phase Two: Q4 2029 |
| Mississippi Crossing | Natural Gas Pipelines | $1.7 billion | Included in the June 26, 2026 FERC Final Environmental Impact Statement. FERC had previously indicated that a certificate order was expected by the end of July 2026. | As early as Q2 2028 |
| South Texas Enhancement Project | Natural Gas Pipelines | $90 million | Tennessee Gas Pipeline filed a FERC application on June 5, 2026. | Q2 2028 |
| Amarillo Expansion Project | Natural Gas Pipelines | $200 million Kinder Morgan share: approximately $75 million |
FERC application expected in Q3 2026. All project capacity is fully subscribed under a long-term contract. | Q3 2028 |
| Pasadena Terminal Expansion | Terminals | $139 million | Supported by a long-term storage and volume commitment with a major national oil company. | Q3 2027 |
| Kinder Morgan Export Terminal Expansion | Terminals | $30 million | Supported by a long-term storage commitment with a major international trading company. | Q1 2027 |
| Western Gateway Pipeline | Products Pipelines | Not disclosed | Kinder Morgan and Phillips 66 have started pursuing permits. The project remains subject to transportation agreements, joint venture agreements and board approvals. | Not announced |
| Cumberland Project | Natural Gas Pipelines | $235 million | Placed in service on May 26, 2026. | Completed |
| Hiland Express Pipeline | Natural Gas Liquids | $165 million | Placed in service on April 29, 2026. | Completed |
| Gulf Coast Express Expansion | Natural Gas Pipelines | $450 million Kinder Morgan share: approximately $160 million |
Placed in service on June 23, 2026. | Completed |
Capital Program Snapshot
| Metric | Reported Value |
|---|---|
| Total Project Backlog | $9.6 billion |
| Expansion Projects Placed Into Service During Q2 2026 | Approximately $660 million, Kinder Morgan share |
| Natural Gas Share of Backlog | Approximately 92% |
| Backlog Supporting Power Generation and Local Distribution Company Demand | More than 60% |
| Additional Projects with Contingent Board Approval | Almost $400 million |
| 2026 Adjusted EBITDA Outlook | More than 5% above budget |
| 2026 Adjusted EPS Outlook | More than 12% above budget |
Record Quarter Provides Financial Flexibility for Continued Growth
Executive Chairman Richard D. Kinder stated that the company’s fee-based business model, strategically located assets and long-term contracts with financially strong customers continue to support stable and predictable cash flows.
He also pointed to increasing LNG exports, rising power demand and industrial expansion as factors creating additional investment opportunities across Kinder Morgan’s footprint.
Major Natural Gas Pipeline Projects Continue Advancing
South System Expansion 4
Among the largest projects discussed in the quarterly release is the approximately $3.5 billion South System Expansion 4 project. Kinder Morgan’s share, including Elba Express, is approximately $1.8 billion.
The project is designed to increase Southern Natural Gas’ South Main Line capacity by approximately 1.3 billion cubic feet per day.
On June 26, 2026, FERC issued a Final Environmental Impact Statement covering both the South System Expansion 4 project and Tennessee Gas Pipeline’s Mississippi Crossing project.
Kinder Morgan stated in its July 22 release that FERC had previously indicated that it expected to issue orders granting certificates of public convenience and necessity for both projects by the end of July 2026.
Subject to the timely receipt of all permits and approvals, Kinder Morgan expects to place the first phase of South System Expansion 4 in service during the fourth quarter of 2028 and the second phase during the fourth quarter of 2029.
Mississippi Crossing
Kinder Morgan also continues advancing the approximately $1.7 billion Mississippi Crossing project.
The project was included in FERC’s June 26, 2026 Final Environmental Impact Statement and is expected to enter service as early as the second quarter of 2028, subject to the timely receipt of all necessary permits and approvals.
South Texas Enhancement Project
On June 5, 2026, Tennessee Gas Pipeline filed an application with FERC for the approximately $90 million South Texas Enhancement Project.
The project is designed to provide incremental firm natural gas transportation service to South Texas and Mexico markets. It would also extend existing shippers’ transportation paths to provide access to additional natural gas supplies.
The announced project scope includes:
- Approximately 1.7 miles of new pipeline
- A new compressor station
- An overpressure protection facility
With the timely receipt of all permits and approvals, Tennessee Gas Pipeline expects the project to enter service during the second quarter of 2028.
Amarillo Expansion Project
Natural Gas Pipeline Company of America continues developing the approximately $200 million Amarillo Expansion Project. Kinder Morgan’s share is expected to be approximately $75 million.
The expansion is intended to support growing natural gas demand in the Texas Panhandle, including demand associated with additional data center development.
The project is expected to provide incremental firm transportation capacity of up to approximately 550,000 Dth/d. Kinder Morgan reported that all of the project’s capacity is fully subscribed under a long-term contract.
NGPL is preparing to file an application with FERC during the third quarter of 2026. Subject to receiving the required permits and approvals, the project is expected to enter service during the third quarter of 2028.
Recently Completed Expansion Projects
Kinder Morgan reported placing approximately $660 million, based on Kinder Morgan’s share, of expansion projects into service during the second quarter of 2026.
Cumberland Project
Project Value: Approximately $235 million
Placed in Service: May 26, 2026
Tennessee Gas Pipeline’s Cumberland Project includes an approximately 32-mile, 30-inch pipeline lateral originating from TGP’s existing 100 Line in Dickson County, Tennessee, and terminating at the Tennessee Valley Authority’s new natural gas-fired power plant in Stewart County.
The project provides approximately 245,000 Dth/d of additional natural gas transportation service to support TVA’s commissioning and operation of the new power plant.
Gulf Coast Express Expansion
Project Value: Approximately $450 million
Kinder Morgan Share: Approximately $160 million
Placed in Service: June 23, 2026
The Gulf Coast Express expansion increases natural gas transportation capacity by approximately 570 million cubic feet per day from the Permian Basin to South Texas markets.
The expansion brings the system’s total capacity to approximately 2.59 Bcf/d.
Hiland Express Pipeline
Project Value: Approximately $165 million
Placed in Service: April 29, 2026
Kinder Morgan converted the Double H Pipeline system from crude oil transportation to natural gas liquids service.
The Hiland Express Pipeline provides Williston Basin producers and midstream companies with pipeline capacity to key market hubs.
Terminal Investments Continue Along the Houston Ship Channel
Pasadena Terminal Expansion
Kinder Morgan is expanding its storage, connectivity and logistics capabilities within its Houston Ship Channel refined products hub through an approximately $139 million project.
The announced scope includes:
- Construction of two dedicated refined products pipelines connecting Kinder Morgan’s Pasadena Terminal with a nearby major refinery
- Various intra-terminal piping modifications
- Tank modifications
- Enhanced in-tank blending capabilities for butane and other gasoline components
The project is supported by a long-term storage and volume commitment with a major national oil company and is expected to enter service during the third quarter of 2027.
Kinder Morgan Export Terminal Expansion
Kinder Morgan is also investing approximately $30 million to expand the connectivity and capabilities of its 1.5-million-barrel Kinder Morgan Export Terminal on the Houston Ship Channel.
The scope includes the reconfiguration of two existing bi-directional refined products pipelines between the export terminal and the Pasadena Terminal, along with various piping and tank modifications intended to enhance in-tank blending capabilities.
The project is supported by a long-term storage commitment with a major international trading company and is expected to enter service during the first quarter of 2027.
Western Gateway Pipeline Continues Advancing
Kinder Morgan and Phillips 66 continue advancing the proposed Western Gateway Pipeline and have started pursuing the necessary permits.
The project remains subject to the execution of definitive transportation service agreements, joint venture agreements and the respective companies’ board approvals.
The proposed refined products pipeline system would connect Midwest and Gulf Coast refinery supplies with Phoenix, Arizona and California markets. It would also provide connectivity to Las Vegas, Nevada through Kinder Morgan’s CALNEV Pipeline.
Kinder Morgan did not disclose a project cost, expected construction start date or anticipated in-service date in its second-quarter release.
2026 Outlook
For 2026, Kinder Morgan originally budgeted:
- Net income attributable to KMI of $3.1 billion
- Adjusted EPS of $1.36
- Declared dividends of $1.19 per share
- Adjusted EBITDA of $8.6 billion
- Year-end Net Debt-to-Adjusted EBITDA of 3.8 times
Based on results through the second quarter, Kinder Morgan now expects Adjusted EBITDA to finish more than 5% above budget and Adjusted EPS to finish more than 12% above budget.
The company also expects to end 2026 with an improved Net Debt-to-Adjusted EBITDA ratio of approximately 3.6 times.
Editorial Perspective
Kinder Morgan’s second-quarter update reinforces several long-term themes shaping capital investment across North American energy infrastructure.
Natural gas remains the company’s primary investment focus, representing approximately 92% of its $9.6 billion project backlog. More than 60% of the backlog is associated with projects supporting power generation and local distribution company demand.
The company’s announced projects also reflect growing infrastructure requirements associated with LNG exports, natural gas-fired power generation, industrial expansion, Mexico exports, Permian Basin production and additional data center development.
For companies serving the energy industry, the significance of Kinder Morgan’s update extends beyond quarterly earnings. The announced projects provide visibility into potential engineering, procurement, permitting, construction, inspection, automation, commissioning, operations and maintenance activity expected to develop between 2027 and 2029.
Several of the largest projects remain subject to FERC certificates and other regulatory approvals, meaning anticipated schedules may change. However, the dollar values, capacity commitments and disclosed in-service targets provide the energy supply chain with a clearer view of where Kinder Morgan is directing capital and where future project activity may emerge.
As regulatory milestones are reached and projects move toward execution, Kinder Morgan’s publicly announced capital program remains one of the largest active infrastructure portfolios in the North American midstream industry.
Editorial Note: This editorial is based on Kinder Morgan’s publicly released Second Quarter 2026 Financial Results issued on July 22, 2026. All project values, capacity figures, filing dates, regulatory milestones, financial results and anticipated in-service dates reflect Kinder Morgan’s public disclosures. Project timelines remain subject to the timely receipt and continued effectiveness of all necessary permits and approvals. Non-GAAP financial measures referenced in this editorial were reported by Kinder Morgan and should be reviewed with the company’s accompanying reconciliations.
