Natural Gas

October 18, 2024

North American midstream companies to report higher earnings for Q3 2024

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HIGHLIGHTS

Midstream operators see higher revenues

Kinder Morgan to support Southeast demand growth

Most of the big North American natural gas midstream operators were projected to report higher revenues for the third quarter compared to the second quarter and higher revenues year over year.

Seven of the 10 largest midstream companies by market capitalization will likely report higher EBITDA for the third quarter compared to the previous quarter, according to S&P Global Market Intelligence data. All of these companies except Cheniere Energy Inc. were expected to report increased EBITDA from the year-ago quarter.

EBITDA is a common metric for pipeline and processing plant operators. It allows earnings to be compared among companies, regardless of debts, taxes and age of physical assets.

Estimated Q3 2024 EBITDA and revenue for large midstream companies EBITDA - Q3 2024 mean estimate 1 Revenue - Q3 2024 mean estimate 1 Includes select large US and Canadian midstream companies by market capitalization as of Sept. 30, 2024. 1 Mean estimate is the consensus operating estimate based on the mean calculation as of Oct. 9, 2024; the estimates are compared out to two decimal places to the operating version of the actual data from prior periods, as reported by S&P Global Market Intelligence. 2Company has four or fewer analyst revenue estimates. All companies have more than four analyst EBITDA estimates. Quarterly figures are presented on a calendar-quarter basis.
Company (ticker) 9/30/2024 market cap ($B) ($B) Vs. actual Q2 2024 Vs. actual Q3 2023 ($B) Vs. actual Q2 2024 Vs. actual Q3 2023
Enbridge Inc. (ENB)2 88.55 3.11 ▼ ▲ 5.05 ▼ ▼
Enterprise Products Partners L.P. (EPD) 63.18 2.46 ▲ ▲ 14.04 ▲ ▲
Kinder Morgan, Inc. (KMI) 49.03 1.93 ▲ ▲ 3.96 ▲ ▲
The Williams Companies, Inc. (WMB) 55.64 1.69 ▲ ▲ 2.49 ▲ ▼
MPLX LP (MPLX)2 45.38 1.67 ▲ ▲ 3.04 ▼ ▲
ONEOK, Inc. (OKE)2 53.23 1.57 ▼ ▲ 6.22 ▲ ▲
Cheniere Energy, Inc. (LNG) 40.69 1.40 ▲ ▼ 3.79 ▲ ▼
Energy Transfer LP (ET) 54.93 3.86 ▲ ▲ 21.86 ▲ ▲
Pembina Pipeline Corporation (PPL)2 23.95 0.79 ▼ ▲ 1.48 ▲ ▼
Targa Resources Corp. (TRGP) 32.43 1.00 ▲ ▲ 4.32 ▲ ▲
Data compiled Oct. 10, 2024.
Source: S&P Global Market Intelligence.
© 2024 S&P Global.

Midstream projects needed for power demand

Analysts on the oil and gas midstream sector's third-quarter earnings calls will be looking for updates on infrastructure projects that can serve growing power generation demand from datacenters and other sources.

"What everyone's looking for there is power demand," Henry Hoffman, a partner at the investment firm SL Advisors, said in an Oct. 15 interview about the earnings season.

Kinder Morgan Inc. kicked off earnings for midstream companies late on Oct. 16.

One of the big gas infrastructure project announcements from second-quarter calls was Kinder Morgan's South System 4 project, a 1.2-Bcf/d expansion of its Southern Natural Gas Co. LLC system. Kinder Morgan said the expansion will meet increased power demand in the US Southeast. Kinder Morgan also has around 5 Bcf/d of gas system expansion opportunities related to power, including around 1.6 Bcf/d directly related to datacenters, executives said.

Midstream custom index

A custom index, composed of the 10 largest midstream companies by market capitalization, underperformed against the benchmark S&P 500 index and the Dow Jones Utility index of 15 US gas and power utilities in the third quarter. The custom index did better than the Alerian MLP index.

Editor:

Markham Watson