Kinder Morgan, Inc. (NYSE:KMI) Q4 2022 Earnings Call Transcript

Steve Kean: Yes. I’d say a couple of things. So first of all, we had one operational issue in December that. As Kim mentioned, we were down 0.7% compared to the prior year. We had one of our major lines in California, the one that serves San Diego down for 12 days. And if that hadn’t been down, we would be back up to close to flat sort of quarter-over-quarter. And so, looking at 2023 and where we stand right now, and we’ll get into the budget more next week, we’re budgeting an increase of about 3.4% in aggregate. For gasoline, we’re looking at something below that, but for jet fuel and diesel together, we’re looking at something above that, close to 6.5%. But if you look at, starting with kind of jet fuel recall, we’ve been slower to recover in jet fuels and EIA given our weighting towards international flights.

EIA for the quarter was down about 14% to 2019, whereas — I’m sorry, EIA was down 10% to 2019, whereas we were down 14%. So, we still got a better recovery on the jet fuel front to close with the rest of the country as we see international, particularly Asian flights come back, we think that will help us. And recall, we’ve got our renewable diesel projects coming on line on the West Coast at the end of the first quarter. And those have take-or-pay contracts for north of 30,000 barrels a day. So, we think that will help with the diesel picture, so. And looking at what we’re seeing right now midway through January, we seem to be, from a refined products perspective, on top of budget.

Operator: Next question is from Brian Reynolds with UBS.

Brian Reynolds: Good afternoon, everyone, and congrats to you, both Steve and Ken. Maybe to start off on the Kinder-based business, which performed pretty well in the quarter. And I just wanted to talk a little bit about future growth opportunities there. Over the past few years, we’ve just seen a lot of competitors come into the market looking to erode that Kinder market share on LNG supply from the Permian and Louisiana. I was just curious if you could talk broadly about how Kinder has a competitive advantage there and whether you guys see yourselves well positioned for new LNG supply projects going forward, or whether effectively, the competition has made returns not attractive at this point? Thanks.

Tom Martin: Yes. So I mean, I think as we said all along, the proximity of our network along Texas, Louisiana, including our storage capabilities there, I think gives us a great advantage, whether we’re directly building into new LNG export facilities or serving other lines that are doing those connections. Just when you have access to as many basins as we do and as — and the mix of both, reservoir storage and salt stores that we have across our footprint, I think we’re still in a great position to participate in the LNG export story. We’ve talked about 50% as being our market share. That’s where we are today. We definitely believe our volumes are going to continue to grow, but it’s hard to call balls and strikes on whether we’re going to meet or exceed 50% going forward, but I feel really good about our position to participate in that whole growth story.