Kinder Morgan, Inc. (NYSE:KMI) Q3 2023 Earnings Call Transcript

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Tristan Richardson: Correct.

Kimberly Dang: Particularly focused on gathering and processing.

Tristan Richardson: Yes.

Kimberly Dang: I think the gathering and processing is going to decrease as a percentage of the overall business. I don’t know the answer as a percentage of overall business. What I can tell you is I don’t anticipate the gathering and processing the EBITDA from gathering and processing on the natural gas side is going down, because we – natural gas demand is growing, and we’re going to continue to need more natural gas molecules. And our biggest position is in the in the Haynesville and Eagle Ford. And those are two places that are very close to the LNG demand. And as Rich and Sital have both mentioned, Eagle Ford has some gas – has some very nice characteristics in that it has low nitrogen. And so that I think would continue to expect to see growth in the volumes coming out of those basins.

Sital Mody: Yes. I mean I think the relative comparison as you secure some of these large projects, you might see a differential in overall percentage. But I think Kim’s when we look at our gathering and processing systems, Bakken constrained, Eagle Ford approaching full processing capacity. And in the Haynesville, we’re trying to keep up. And so I think that trend will continue as we see these LNG facilities come on. And as far as the proportionate – the relative proportion, it all depends on if we’re successful in getting these big LNG feeder projects and not, and those are obviously material.

Kimberly Dang: So on the Haynesville being constrained, that means there’s going to be opportunities for new projects as that volume increase on the processing capacity at – being at capacity on processing in the Eagle Ford. There may be opportunities to charge incremental rate there. So just to clarify what Sital was saying.

Tristan Richardson: Appreciate it. And then a quick follow-up. Just on the energy transition venture side, maybe top of the funnel, commercial activity you’re seeing around RNG maybe just a sense of overall potential capacity projects out there, particularly as you get past 2024 and Autumn Hills comes online?

Anthony Ashley: Yes. Hi, Tristan, it’s Anthony. Yes, so as we look 2024 and beyond, we do have some additional projects within the North American natural acquisition, landfill gas and electric projects, which are potential RNG conversion opportunities. And so now we’re got a little bit more clarity from the EPA on the RINs potential. We are now looking at those potential projects again. And we have a few other ones, I would say, that we’re looking at in terms of organic growth potential, but our focus has really been getting our existing projects up and in service and operating well and going through the wind generation process. But yes, we do have some potential opportunities beyond Autumn Hills.

Kim Dang: And just on the facilities, I mean for an update there, two of the three that we’re bringing in service this year are in service. One, we’ve had a few operational issues. We think we’ve largely worked through. The other one is ramping up. And the third one we expect to be on by the end of the year.

Tristan Richardson: Appreciate the update. Thank you, Kim.

Operator: Thank you. Our next caller is Neal Dingmann with Truist Securities. You may go ahead.

Neal Dingmann: Good afternoon, all. You talked a bit about M&A. I guess my question is just perhaps on near-term M&A. I’m wondering how you all would think about potentially adding natural gas pipelines, various other assets. I’m just wondering given your current footprint, is there a preference? Or are you sort of agnostic on looking at various assets?

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