Timing note: Today is Wednesday, July 22, 2026. KMI’s 2026Q2 earnings call is therefore scheduled for today, not tomorrow, based on the date provided.
KMI enters 2Q26 with strong operating and strategic momentum, but a high bar for the quality—not necessarily the absolute level—of results. In 1Q, the company exceeded its own plan across every operating segment and said it expected full-year Adjusted EBITDA to come in more than 3% above its original $8.6 billion budget, excluding any Monument Pipeline contribution. That implies more than roughly $250 million of EBITDA upside versus budget.
The key question for investors is whether 2Q confirms that the upside is increasingly structural—capacity sales, gas gathering growth, LNG and power demand, favorable terminal pricing, and projects entering service—or whether most of the 1Q beat was transient, driven by unusually cold weather, commodity volatility, and a terminal-contract termination payment.
My read: the setup remains constructive, but the call matters more than the headline EPS print. Investors should focus on the durability of gas-pipeline outperformance, progress on the project backlog and permits, the Monument acquisition close/contribution, and whether management formalizes a larger uplift to 2026 guidance.
KMI’s 1Q26 Adjusted EBITDA was $2.539 billion, up 18% year over year, while adjusted EPS rose 41% to $0.48. Management characterized the quarter as unusually strong and said it expected to outperform its 2026 EBITDA plan by more than 3%.
However, management also identified several factors that were not fully recurring:
That does not negate the result. The more important positive is that management said every segment outperformed budget, and it pointed to continued gas-market tightness, growth projects, capacity sales, gathering volumes, and higher asset utilization as ongoing contributors.
Watch for: - Whether KMI maintains “more than 3% above budget,” raises that expectation, or provides a more quantitative full-year EBITDA/EPS outlook. - A clear split between weather/one-time gains and recurring base-business improvement. - Any change to the year-end leverage expectation of roughly 3.7x net debt/Adjusted EBITDA.
Natural Gas Pipelines is the central reason to own KMI going into this report. In 1Q, adjusted segment EBDA rose 17% year over year to $1.797 billion. Transport volumes increased 8%, and gathering volumes rose 15%, with LNG deliveries on Tennessee Gas Pipeline and growth at KinderHawk/Haynesville among the important contributors.
The fundamental backdrop remains favorable:
The near-term issue is whether 2Q demonstrates a normalizing but still healthy run-rate after the winter-driven first quarter. A solid result would show continued growth in firm capacity revenue, gathering, LNG-related volumes, and expansion-project contributions even as seasonal weather benefits fade.
Watch for: - Natural-gas transportation and gathering-volume growth. - Updates on KinderHawk expansion timing and utilization. - Evidence that power-related project opportunities are converting from the “shadow backlog” into sanctioned capital projects. - Incremental LNG feedgas commitments or capacity expansions. - Commentary on gas-storage demand, a differentiator for KMI given its more than 700 Bcf of working gas-storage capacity.
At the end of 1Q, KMI’s backlog stood at $10.1 billion, up modestly sequentially after adding $375 million of projects and placing $230 million in service. The remaining backlog was expected to generate an aggregate first-full-year Project EBITDA multiple of approximately 5.6x, an attractive return profile if execution and permitting remain on track.
The largest projects to monitor are:
| Project | Key investor issue going into 2Q |
|---|---|
| Trident Intrastate Pipeline | Construction progress, capital discipline, and timing toward first-phase service in 1Q27 |
| SSE4 | Whether KMI receives the anticipated July 2026 FERC certificate and keeps the 2028/2029 in-service framework intact |
| Mississippi Crossing (MSX) | Same permitting catalyst: expected FERC action and schedule confidence |
| Western Gateway | Whether definitive shipper/JV agreements advance toward FID; it was not yet in backlog at 1Q |
| Florida Gas Transmission projects | Commercial conversion following successful open seasons |
| Creekside / LAHA / Amarillo expansions | Incremental proof that data-center, industrial, and power demand is becoming contracted investment |
The key positive surprise would be a meaningful backlog increase, especially from power-generation projects. The key negative surprise would be permitting delays, project-cost inflation, or a less confident schedule for Trident, SSE4, or MSX.
KMI announced the $505 million acquisition of Monument Pipeline in April. The asset serves the Houston area with about 225 miles of pipeline and transportation/storage services for utilities, LNG shippers, and industrial customers. It is supported by long-term take-or-pay contracts, with an approximately nine-year revenue-weighted average remaining contract term.
Management expected the deal to close in 2Q and said it would be additive to full-year outperformance, although its initial 2026 outlook excluded Monument’s contribution.
Watch for: - Confirmation that the transaction closed. - Initial EBITDA contribution and any integration costs. - Updates on storage and system-connectivity synergies. - Details on growth capital that could bring the acquisition’s multiple below the initially cited high-single-digit level over time.
The acquisition is strategically sensible: it reinforces KMI’s Houston/Texas intrastate gas platform, where LNG, industrial demand, local distribution, and power generation are all growing.
Terminals delivered a very strong 1Q, with adjusted segment EBDA up 20% year over year to $330 million. But investors should expect a less dramatic growth rate in 2Q because 1Q benefited from payments tied to early termination of certain storage agreements.
The more durable positives are still meaningful:
Watch for: recurring terminal rates, utilization, bulk-terminal volumes, vessel-contract coverage, and whether the backfill opportunities remain on schedule.
Products Pipelines posted a strong 1Q, helped by transmix commodity pricing, retroactive rate recovery, and easier comparisons around a prior-year turnaround. The volume picture was mixed: refined-products volumes were down 2%, while crude and condensate volumes were down 12%, primarily because Double H was converted to NGL service.
For 2Q, investors should look for:
The CO2 segment is a smaller driver but remains the main direct commodity-price sensitivity. KMI is substantially hedged: as of 1Q, it had hedges on 23.15 MBbl/d of 2026 crude output at an average $64.54/bbl. Management has said roughly 90% of current-year oil production was hedged.
Higher oil prices can help the unhedged portion, but earnings will also depend on production volumes, power costs, NGL realizations, and RNG/RIN performance. Geopolitical oil-market volatility should therefore be a modest tailwind rather than a thesis-changing earnings driver.
KMI ended 1Q with:
The stock closed at $32.39 on July 21, up about 1.3% from June 30; the annualized dividend equates to an indicated yield of roughly 3.7% at that price.
The balance-sheet story has improved materially. Moody’s upgraded KMI to Baa1 in March, giving the company the equivalent of BBB+ ratings at all three major agencies. The main capital-allocation test in 2Q is whether KMI can keep funding its sizable growth program, Monument, and the dividend while holding leverage near its stated range.
KMI’s 2Q26 report is less about whether the company can beat a quarterly number and more about whether management can validate a higher normalized earnings trajectory. The company has an unusually favorable strategic position in U.S. natural-gas infrastructure: a large, highly utilized network; meaningful storage; LNG connectivity; and an expanding opportunity set tied to power demand, industrial load, and data centers.
The near-term valuation debate will hinge on the quality and persistence of 1Q’s outperformance. If KMI shows that base-business strength, contracted growth projects, and Monument can offset the fade in weather and one-time terminal benefits, investors should view 2026 as a transition toward stronger 2027–2029 EBITDA rather than simply a good first quarter.