Kinder Morgan Sees Strong Natural Gas Demand Over the Next Six Years

By Irina Slav - Apr 18, 2024

Kinder Morgan expects demand for natural gas to increase palpably over the next six years the company said at the release of its first-quarter financial results.

In it, the company reported a 10% increase in its earnings per share, even though these came a bit below analyst expectations, and an annual increase in net profit from $679 million in the first quarter of 2023 to $746 million this year.

Income from Kinder Morgan’s gas pipeline played a big role in its first-quarter performance, the company said in its report, along with oil products.

“Notwithstanding the current low natural gas price environment, the future looks very bright for our Natural Gas Pipelines business segment,” chief executive Kim Dang said.

“We expect demand for natural gas to grow substantially between now and 2030, led by more than a doubling of demand for liquefied natural gas (LNG) exports and a more than 50% increase in exports to Mexico.”

Dang went on to forecast a surge in the demand for natural gas from the power generation industry in response to the increase in electricity demand from the information technology sector as the use of artificial intelligence increases.

At the same time, Dang brushed off the Biden administration’s pause in approvals for new LNG export capacity, saying it would not affect Kinder Morgan’s LNG plans.

Natural gas, which currently meets 43.1% of U.S. utility-scale electricity generation, will continue to meet a large part of American power demand as new wind and solar capacity installations will need backup power generation, according to gas industry executives

Now, AI is proving to be another major driver of demand for natural gas as wind and solar cannot provide the necessary uninterrupted supply of electricity that data centers would require with the increased use of artificial intelligence in their operations.

By Irina Slav for Oilprice.com