By Sourasis Bose
(Reuters) -Kinder Morgan fell short of Wall Street estimates for third-quarter profit on Wednesday and cut its full-year forecast as the U.S. pipeline operator struggles with weaker commodity prices and lower crude volumes.
Shares of the company, whose pipelines carry about 40% of total U.S. natural gas production, fell 2.6% in extended trading.
“For the full year, we expect refined product volumes to be slightly below our plan, up to 2% in 2023,” President Thomas Martin said in a conference call.
U.S. WTI crude oil prices fell about 8.1% in the third quarter from a year earlier and concerns about global demand remain.
Crude oil and condensate volumes decreased by 4% compared to the same quarter last year, while natural gas transported increased by 2%.
The company forecast adjusted annual core earnings to be 2% below prior guidance, compared to prior expectations of in line or within 1-2% below.
Kinder Morgan also cited startup delays at its renewable natural gas facilities for the revised forecast.
The company, like many U.S. energy peers, is pinning its hopes on AI-powered data center power needs to boost natural gas sales.
“The demand for data centers has increased enormously,” says CEO Kimberly Dang. The overall gas market could grow by 25 billion cubic feet per day over the next five years, she said.
The company said the Gulf Coast Express Pipeline, which it operates and in which it has an interest, has greenlit an approximately $455 million expansion project that will boost natural gas supplies from the Permian Basin to South Texas markets by 570 million cubic feet per day would increase.
Kinder Morgan posted adjusted earnings of 25 cents per share, compared with analysts’ average expectations of 27 cents, according to LSEG estimates.
At the product pipeline division, which includes refined products, adjusted core profit fell about 11.5% to $277 million.
The company is working with agencies to defend its permits related to the Cumberland gas pipeline project in Tennessee after a U.S. appeals court put them on hold.
(Reporting by Sourasis Bose in Bengaluru; Editing by Sriraj Kalluvila)
