Kinder Morgan Inc (NYSE:KMI) stock rose 3.24% (As on July 18, 11:27:09 AM UTC-4, Source: Google Finance) though the company expects data center driven electricity need to be a significant driver of natural gas demand, after missing Wall Street estimates for second-quarter profit and revenue. The company reiterated that AI operations and data centers will boost demand for natural gas, adding that reliability of the fuel will help in increased reliance over other renewable sources. Further, the company is having commercial discussions on over 5 billion cubic feet per day (bcf/d) of opportunities related to power demand, and that includes the 1.6 of data center demand. Adjusted core profit from the company’s natgas pipeline segment rose nearly 2.5% to $1.23 billion, as higher transport and gathering volumes helped offset the impact of asset divestitures and lower commodity prices. Adjusted core profit from the transportation of CO2, however, fell about 6.3% to $164 million in the quarter, hurt by lower crude and natural gas liquids volumes and CO2 sales. The company launched a binding open season on its proposed South System Expansion 4 project, designed to increase Southern Natural Gas (SNG) Pipeline’s South Line capacity by 1.2 bcf/d.

Moreover, the project backlog at the end of the second quarter was $5.2 billion, up from $3.3 billion in the first quarter of 2024. The company expects the remaining $3.8 billion of projects in the backlog to generate an average Project EBITDA multiple of approximately 5.4 times. The company is devoting approximately 80% of the project backlog to lower-carbon energy investments, including conventional natural gas, renewable natural gas (RNG), renewable diesel (RD), feedstocks associated with RD and sustainable aviation fuel (SAF), as well as carbon capture and sequestration.

KMI in the second quarter of FY 24 has reported the adjusted earnings per share of 25 cents, missing the analysts’ estimates for the adjusted earnings per share of 26 cents, according to LSEG data. The company had reported the adjusted revenue of $3.57 billion in the second quarter of FY 24, missing the analysts’ estimates for revenue of $4.13 billion.

For 2024, including contributions from the acquired STX Midstream assets, KMI budgeted net income attributable to KMI of $2.7 billion ($1.22 per share), up 15% versus 2023, and expects to declare dividends of $1.15 per share for 2024, a 2% increase from the dividends declared for 2023. The company also budgeted 2024 DCF of $5 billion ($2.26 per share), and Adjusted EBITDA of $8.16 billion, both up 8% versus 2023, and to end 2024 with a Net Debt-to-Adjusted EBITDA ratio of 3.9 times.