Kinder Morgan (KMI) Barclays 38th Annual CEO Energy-Power Conference 2024 summary

Macro trends and demand outlook

• Power demand growth is driven by migration, business relocation, onshoring, and reserve margin increases, especially in the Southern U.S. and Texas.

• Data center and AI-related demand is a significant but partial driver, with 1.6 Bcf/day of current opportunities out of 5 Bcf/day total power demand under discussion.

• Texas peak power demand rose from 70 GW in 2018 to 86 GW in 2023, reflecting broader regional trends.

• U.S. natural gas demand is projected to grow from 108 Bcf/day to 128 Bcf/day by 2030, with LNG, Mexico exports, and industrial use as key contributors.

• Market share in power demand is strong, serving 20% of U.S. and 40% of Texas power needs.

Infrastructure projects and expansion

• SNG pipeline expansion has 1.2 Bcf/day of commitments for a 3 Bcf/day project, targeting late 2028 in-service, with regulatory filings expected next summer.

• Expansion involves looping existing pipelines and adding compression, mainly on existing rights of way.

• Storage capacity is being expanded with recent brownfield projects (5 Bcf and 10 Bcf), and greenfield opportunities are under consideration as market needs grow.

• Double H pipeline is being converted to NGL service by 2026 to capture growing Bakken NGL output and improve asset utilization.

Supply and regional positioning

• Supply growth to meet demand is expected from the Permian (8 Bcf/day), Haynesville (7 Bcf/day), and Eagle Ford (0.5+ Bcf/day), with less from Marcellus/Utica due to constraints.

• Strong positions in Eagle Ford and Haynesville, with potential for more growth than current projections.

• GCX expansion from the Permian is seen as inevitable, with timing dependent on shipper commitments and market conditions.