Kinder Morgan's 2024 Vision: Solid Growth, Strategic Investments, Dividend Payouts & More

Kinder Morgan Inc KMI disclosed preliminary 2024 financial forecasts projecting net income attributable per share of $1.21 (+11% Y/Y), DCF per share of $2.21 (+5% Y/Y), and Adjusted EBITDA of $8.0 billion (+5% Y/Y).

This reflects growth projects prominently in Natural Gas Pipelines and Energy Transition Ventures and contract rate escalations in the Products Pipelines and Terminals business segments. 

"We expect 5% growth across the board in 2024 in Adjusted EBITDA, distributable cash flow (DCF) and DCF per share due to growth projects in all our business segments, but most prominently in Natural Gas Pipelines and Energy Transition Ventures, as well as from contract rate escalations in our Products Pipelines and Terminals business segments," said Kim Dang, KMI Chief Executive Officer.

Also, KMI plans to invest $2.3 billion in discretionary capital expenditures, including expansion projects and contributions to joint ventures.

The company expects to return an anticipated $1.15 per share dividend (annualized) to shareholders. No share repurchases are assumed in the budget, but the company said it will have substantial capacity to transact opportunistically as the 2024 Net Debt-to-Adjusted EBITDA ratio is forecast to be 3.8 times, far below long-term target of 4.5 times.

The company assumes average annual prices for West Texas Intermediate (WTI) crude oil and Henry Hub natural gas of $82 per barrel and $3.50 per MMBtu, respectively, consistent with forward pricing during the budget process. 

For 2024, KMI expects every $1 per barrel change in the average WTI crude oil price to impact DCF by about $8 million and each $0.10 per MMBtu change in the price of natural gas by about $1 million.

KMI President Tom Martin said, "We expect to continue benefiting from strong natural gas market fundamentals driving growth on our existing natural gas transportation, storage, and gathering and processing assets as well as expansion opportunities. In addition, we anticipate benefitting from increased rates in our refined products businesses, demand for renewable diesel and renewable diesel feedstocks, and demand for renewable natural gas."

Also Read: Kinder Morgan Takes Over NextEra Energy Partner's South Texas Pipelines In Billion-Dollar Energy Shakeup

KMI's board of directors preliminarily reviewed the 2024 budget and planned to take formal action on it during the annual investor day conference on January 24, 2024, in Houston, Texas.

Price Action: KMI shares are trading lower by 0.17% at $17.82 premarket on the last check Tuesday.