Kinder Morgan's Southeast Connector just got bigger: 20 shippers, 48-inch pipe, 3.7 Bcf/d in sight
Two weeks after a $3.1 billion FID sized the pipe at 2.6 Bcf/d, Kinder's bulletin board shows another 1.1 Bcf/d of shipper awards and 20 takers. The land fight along the 150-mile Tennessee route has not started yet; the commercial demand already beat the plan.
Vincent Jiang · 3 min read
Kinder Morgan's−0.07% — Kinder Morgan, down 0.07 percent today Southeast Connector was sold to investors on October 21 as a $3.1 billion, 2.6 Bcf/d pipe 1. Two weeks later, the commercial side is outrunning the plan. The company's electronic bulletin board shows shipper awards for an additional 1.1 Bcf/d, which would lift the project toward 3.7 Bcf/d, and Natural Gas Intelligence counts 1.12 million Dth/d of firm capacity awarded to 20 bidders 1. That is a 42% jump in contracted size in a fortnight, before any formal upsizing 1.
A pipe bigger than almost anything on the map
The pipe itself is growing with the bookings: it will be a 48-inch line, larger than the 42-inch ceiling most interstate gas pipes reach, and Kinder plans an Extension to hand gas off to Transco and other pipelines in Tennessee, Alabama and Georgia 1. The route through Tennessee runs about 150 miles from Sumner County, northeast of Nashville, to Marion County, west of Chattanooga, with a late-2030 in-service target 7.
Who pays tells you who believes it. The 20 shippers signed firm capacity on 20-year take-or-pay contracts, the structure Kinder used on the Southeast Connector and Permian Link joint ventures, meaning customers pay for reserved capacity whether or not they use it 8.
Kalkine notes the same risk shift in its read of the quarter: record results, several pipeline FIDs and a year expected to finish ahead of budget 5. The demand behind the bookings is LNG exports, electricity demand and industrial expansion, with data centers the fastest-moving piece; nearly 200 pipeline projects totaling more than 17,000 miles are underway nationally, and TVA alone may build a dozen gas plants by 2031 7.
Spending ahead of the cash
The money is moving in the same direction. Kinder's capital spending hit $1.045 billion in the September quarter, up 32% from a year earlier and the fourth straight quarterly increase, while operating cash flow of $1.59 billion has not kept the same pace 9. Record backlog of $14.4 billion in gas projects, backed by 20-year contracts, is the reason management is willing to spend ahead of cash 8.
Kinder Morgan is spending ahead of its cash flow to build the backlog
Capex hit a period high of $1.045B in Q3 2026, a fourth straight quarterly increase
- Operating cash flow
- Capital spending
Data
| Operating cash flow | Capital spending | |
|---|---|---|
| Q4 '24 | $1.51B | $0.77B |
| Q1 '25 | $1.16B | $0.77B |
| Q2 '25 | $1.65B | $0.65B |
| Q3 '25 | $1.41B | $0.79B |
| Q4 '25 | $1.69B | $0.82B |
| Q1 '26 | $1.49B | $0.8B |
| Q2 '26 | $1.96B | $0.98B |
| Q3 '26 | $1.59B | $1.05B |
The risk sits elsewhere
Landowners in ten Tennessee counties have already received survey notices, and the Sierra Club's warning is that a 48-inch pipe carries a blast zone that could run almost half a mile, in a state with no setback rule 7. Kinder says the project will include 24/7 monitoring, integrity testing and corrosion protection 7.
The market is not yet convinced. KMI fell 4.22% to $30.19 on November 5 4, and after the close CFO David Michels signed an 8-K announcing an updated investor presentation, posted by 6:00 a.m. Central on November 6 2 3. The presentation confirms the 4Q deck is live 6. The tell for the stock: whether the updated deck shows more of that $14.4 billion backlog coming from this one pipe 6.
More detail on the route and the land fight in our November 1 story, "Kinder Morgan's $3.1B Southeast Connector runs through 10 Tennessee counties, and the land fight starts now."
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