Western Gateway Pipeline Shipper Demand Might Change The Case For Investing In Kinder Morgan (KMI)

• Phillips 66 and Kinder Morgan recently reported that the initial open season for their proposed Western Gateway refined products pipeline system has closed after attracting strong shipper commitments linking Borger, Texas to Phoenix, Arizona and, via reversed SFPP assets, into key California markets.
• The project’s use of joint tariffs, pipeline reversals and connections to assets like Kinder Morgan’s CALNEV line could reshape refined product flows from Midwest refineries to Phoenix, Los Angeles and Las Vegas, enhancing Kinder Morgan’s role in western U.S. fuel logistics.
• Next, we’ll examine how Western Gateway’s strong shipper interest and expanded Los Angeles access could influence Kinder Morgan’s long-term investment narrative.

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Kinder Morgan Investment Narrative Recap

Kinder Morgan’s investment story still rests on stable, fee-based cash flows from a vast pipeline network and gradual earnings growth, balanced against meaningful leverage and interest coverage constraints. Western Gateway’s strong shipper interest appears directionally positive for long term volume visibility, but it does not materially change the near term focus on debt levels and funding capacity for growth projects.

Among recent announcements, Kinder Morgan’s 2026 net income guidance of US$3.1 billion and its ninth consecutive year of dividend increases frame how new projects like Western Gateway must compete for capital against existing commitments. For shareholders, the key question is whether incremental projects can support earnings growth without putting additional strain on a balance sheet that already faces higher interest costs and a net debt to EBITDA ratio near 4x.

Yet behind Western Gateway’s promise, investors should also recognize the growing risk that long term fossil fuel demand could be pressured by...

Read the full narrative on Kinder Morgan (it's free!)

Kinder Morgan’s narrative projects $20.2 billion revenue and $3.7 billion earnings by 2028. This requires 8.2% yearly revenue growth and a $1.0 billion earnings increase from $2.7 billion today.

Uncover how Kinder Morgan's forecasts yield a $31.06 fair value, a 14% upside to its current price.

Exploring Other Perspectives

Three Simply Wall St Community fair value estimates for Kinder Morgan span roughly US$31.06 to US$49.73 per share, underscoring how far apart individual views can be. You can weigh these against Kinder Morgan’s high leverage and interest coverage constraints, which many see as central to how effectively the company can convert projects like Western Gateway into sustained cash flow growth.

Explore 3 other fair value estimates on Kinder Morgan - why the stock might be worth just $31.06!

Build Your Own Kinder Morgan Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Kinder Morgan research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Kinder Morgan research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Kinder Morgan's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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