Kinder Morgan delivered a record second quarter in 2026, posting financial results that exceeded internal budgets and prompted an upward revision to its full-year guidance. The midstream company continues to benefit from a strong energy infrastructure, driven by surging U.S. natural gas demand, newly expanded pipeline infrastructure, and increased liquefied natural gas (LNG) exports.
The company reported an adjusted EBITDA of $2.199 billion, representing a 12% year-over-year increase that beat consensus estimates and led to an upward revision of full-year guidance.
Kinder Morgan maintained a strong balance sheet with a net debt-to-adjusted EBITDA ratio of 3.6x and declared a 2% year-over-year dividend increase. They achieved a record second quarter net income of $867 million, generating $2 billion in cash flow from operations and $1 billion in free cash flow after capital expenditures.
Following a strong first half of the year, management now projects full-year adjusted EBITDA to beat original 2026 budgets by more than 5%, or approximately $430 million.
The company provided updates on its project backlog, now sitting at $9.6 billion. Kinder Morgan added $200 million in new project additions during the quarter and placed approximately $660 million in expansion projects into services. This growth is linked almost exclusively to the natural gas sector.
More than 60% of the backlog is specifically geared toward supporting local distribution company demand and power generation, a segment increasingly driven by the energy requirements of AI demand and data centers.
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Kinder Morgan’s three largest natural gas expansion projects underway remain both on schedule and budget. The Mississippi Crossing and South System Expansion 4 received final FERC Environmental Impact statements in June, and they are expected to receive FERC certificates by the end of the month.
The company anticipates reaching a final investment decision on the Western Gateway system with Phillips 66 in the next two months. The project aims to decrease dependence on global oil markets by providing a domestic supply of refined products to California and Arizona.
Investors can gain exposure to KMI in the Alerian Energy Infrastructure ETF (ENFR), weighted 5.0% as of July 21. ENFR tracks the Alerian Midstream Energy Select Index, a composite of North American midstream energy infrastructure companies.
The fund recently crossed $500 million in assets on July 17, garnering $170 million in net assets from flows and price appreciation since January 1.
Kinder Morgan’s project backlog maintains a favorable project EBITDA multiple of 5.6x, excluding certain projects. Management noted that while the official backlog has hovered around $10 billion, there is still capacity to grow.
