Release Date: April 17, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Could you elaborate on the decision process to adjust the leverage target and its practical implications?
A: (David Patrick Michels, VP & CFO, Kinder Morgan, Inc.) We adjusted the leverage target from 4.5x to a range of 3.5 to 4.5x to reflect our actual operating leverage, which has been consistently below the previous target. This change aligns our policy with our operational practices without altering our company's operational approach.
Q: With the expected increase in demand for power generation, particularly from AI and data centers, what specific opportunities does Kinder Morgan foresee?
A: (Kimberly Allen Dang, CEO & Director, Kinder Morgan, Inc.) The demand increase is expected to be focused on natural gas due to the need for consistent power. Given Kinder Morgan's extensive natural gas network, we anticipate capturing a significant portion of this new demand, although exact figures are currently difficult to project.
Q: How are the current negative Waha prices in the Permian impacting Kinder Morgan?
A: (Richard D. Kinder, Executive Chairman of the Board, Kinder Morgan, Inc.) The negative prices are a short-term effect of a warm winter. Kinder Morgan benefits marginally from these conditions through proprietary storage in the intrastate markets, which allows us to share in some upside.
Q: Can you provide an update on the integration and performance of the newly acquired South Texas Midstream assets?
A: (Thomas A. Martin, President, Kinder Morgan, Inc.) The integration is progressing well, with some commercial and development opportunities materializing sooner than expected. Although initial volumes were slightly lower due to current price environments, the overall performance is aligning with our 2024 projections.
Q: What impact does the new leverage target have on Kinder Morgan's approach to shareholder returns?
A: (Kimberly Allen Dang, CEO & Director, Kinder Morgan, Inc.) The adjustment in leverage target does not change our capital allocation strategy or approach to shareholder returns. It merely aligns our policy with our operational practices over the past few years.
Q: Are there any discussions or early projects related to meeting the increased demand for power from AI and data centers?
A: (Peter Staples, Director of IR, Kinder Morgan Energy Partners, L.P.) We are engaging in preliminary discussions and projects, such as connecting data centers to our systems in the Southeast, which require reliable power and additional storage to manage intermittency issues.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
