As the AI revolution sweeps across global industries, one unlikely beneficiary is emerging at the intersection of energy infrastructure and digital transformation—Kinder Morgan (NYSE:KMI). Often seen as a traditional midstream pipeline operator, the company is now being viewed through a new lens as a crucial enabler of the AI era, thanks to its pivotal role in transporting the natural gas that powers the data centers behind machine learning and artificial intelligence. With natural gas demand hitting record highs and AI-driven energy needs rising fast, Kinder Morgan finds itself uniquely positioned—geographically and operationally—to benefit from both tailwinds. Recent statements from management and analysts alike indicate that KMI’s exposure to liquefied natural gas (LNG), electric power generation, and resilient fee-based infrastructure provides a foundation for growth in a rapidly evolving landscape. Its massive U.S. footprint, long-term contracts, and strategic expansions make it a quiet but significant participant in AI’s infrastructure layer.
AI-Driven Data Center Boom Fuels New Demand for Natural Gas
The rapid proliferation of AI and cloud data centers has sparked a massive increase in electricity demand, and natural gas is playing a central role in meeting that surge. Kinder Morgan’s management emphasized on its latest earnings call that many of the new projects added to its $8.8 billion backlog are directly tied to growing power demand, much of which is driven by AI infrastructure. As data center construction spreads across the Southern U.S.—particularly in high-growth states like Texas, Arizona, and South Carolina—Kinder Morgan is seeing increased requests from regulated utilities and private customers to expand or build new pipelines. The newly announced Bridge project in South Carolina, supported by a 30-year utility contract, is just one example of how the company is positioning itself as the go-to supplier for power generation needs near AI clusters. CEO Kimberly Dang also noted that over 70% of new project additions this quarter were tied to electric power, with a significant portion linked—either directly or indirectly—to AI demand. In a constrained permitting environment, KMI’s existing rights-of-way and operating footprint give it a competitive edge. The company already transports 40% of the natural gas consumed in the United States, giving it significant scale to capture incremental volume. As AI adoption scales, Kinder Morgan is not just a bystander—it’s becoming part of the digital transformation story by providing the fuel that powers it.
LNG Export Growth Provides A Structural Demand Floor
While AI-related demand is a recent accelerant, Kinder Morgan’s core growth thesis still rests on the global expansion of liquefied natural gas (LNG) exports, which have reached all-time highs in 2025. The company reaffirmed that U.S. feedgas demand—driven by LNG terminal activity—has hit record levels, with peak daily demand exceeding 17 billion cubic feet. Despite China halting U.S. LNG imports since February, demand from Europe and Asia remains robust, largely due to geopolitical considerations. European nations, wary of Russian gas dependency, are accelerating LNG import infrastructure, while Asian markets like South Korea and Indonesia are in active discussions to increase purchases. Kinder Morgan’s contracts with LNG export terminals are long-term and underwritten by creditworthy counterparties, insulating it from short-term commodity price swings or geopolitical disruptions. With most of the LNG terminal projects already under construction or financially committed (FID), management projects an additional 16 Bcf/day in demand by 2030. KMI’s Gulf Coast footprint positions it well to handle a majority of this volume. The company also highlighted new projects like Trident and Evangeline Pass expansions, designed specifically to support LNG-related growth. Importantly, nearly all of these expansions are backed by long-term take-or-pay agreements, ensuring cash flow stability. This growth trajectory means that, regardless of broader economic headwinds or AI’s pace of adoption, LNG exports serve as a foundational pillar for Kinder Morgan’s earnings and project pipeline.
Resilient Fee-Based Business Model With Minimal Commodity Exposure
Kinder Morgan's business model is built to weather volatility. Unlike many other energy firms whose earnings swing wildly with commodity prices, KMI generates over 95% of its EBITDA from take-or-pay contracts, fixed fees, or hedged positions. Only 5% of the company’s 2025 earnings are exposed to commodity price risk. This insulates the business from natural gas price fluctuations and ensures predictable cash flows—an important attribute for infrastructure investors and institutions focused on stability. Even amid current economic uncertainty, the company reported $1.16 billion in operating cash flow in Q1 2025, easily covering its $770 million in capital expenditures and $650 million in dividends. The company’s leverage remains within its 3.5x–4.5x target range, and with adjusted EBITDA expected to grow 5% this year (including contributions from the Outrigger acquisition), KMI’s balance sheet is in healthy shape. The fee-based structure extends across business segments—from interstate natural gas transport and LNG feedgas to refined products and CO2 infrastructure. KMI’s strategic locations and long-standing relationships with utilities and exporters help it secure multi-decade contracts, such as the 30-year agreement behind the Bridge expansion. In a sector often rocked by macro headwinds, Kinder Morgan stands out as a low-volatility, infrastructure-centric way to gain exposure to global energy trends.
Strategic Geographic Footprint & Expansion Readiness
Geography plays a critical role in energy infrastructure, and Kinder Morgan holds a unique advantage. With 70,000 miles of pipelines and coverage across the Gulf Coast, Southeast U.S., and Southwest regions like Arizona, the company is positioned precisely where demand is growing. Its pipelines serve as the backbone for several major LNG terminals, power plants, and industrial hubs. Arizona, for instance, is experiencing one of the fastest migrations of both population and industrial capacity—including data centers—and Kinder Morgan’s EPNG pipeline is already running near capacity. The company is evaluating both brownfield and greenfield expansions in the Desert Southwest, as well as in Mexico where gas-fired power plant development is accelerating. Furthermore, the company's intrastate network in Texas is being expanded with capital-efficient projects aimed at feeding the Austin and Houston metro areas—hotspots for data center construction. KMI's ability to layer small-to-mid-scale projects atop its massive infrastructure backbone enables it to scale without taking on excessive risk. Its backlog additions of $900 million this quarter alone reflect the strong pace of customer demand. In addition, its permitting relationships and proactive material sourcing strategies (such as securing domestic steel to minimize tariff exposure) allow Kinder Morgan to navigate regulatory delays better than most peers. As permitting reforms progress and energy policy becomes more favorable to infrastructure expansion, KMI stands ready to capitalize on regional demand upswings and unlock incremental earnings.
Final Thoughts
Source: Yahoo Finance
As we can see in the above chart, Kinder Morgan’s stock trajectory has been more or less flat since last November with some amount of volatility. The company’s valuation has seen a notable multiples expansion with its LTM EV/ EBITDA expanding from 12x in June 2024 to 14.93x today and might even expand further. The reason for this is that the company is increasingly being viewed not just as a legacy energy transport company, but as an integral player in powering the digital economy. Its exposure to surging LNG demand, stable fee-based revenues, AI-driven power demand, and strategic geographic positioning create a multifaceted growth story grounded in real infrastructure. While investor enthusiasm about the AI narrative has led to premium valuations in tech and utilities, Kinder Morgan offers a differentiated way to participate—via the very fuel that powers this transformation.
