Kinder Morgan's Dividend Growth Prospects Just Got a Little Brighter
There have been some questions about whether Kinder Morgan (NYSE: KMI) will have enough fuel to continue growing its dividend in the future. The pipeline company expects to invest $1.5 billion on capital projects this year, which would nearly exhaust its roughly $1.7 billion expansion backlog. That's a far cry from the $2 billion to $3 billion it used to invest each year in expanding its operations. With the company investing in fewer capital projects, cash flow won't grow as fast in the future, limiting its ability to increase the dividend.
However, the pipeline company's dividend growth prospects are getting a little brighter after Kinder Morgan and its partners agreed to expand their Permian Highway Pipeline. The project will supply them with some incremental cash flow starting late next year.
Kinder Morgan, Kinetik Holdings (NASDAQ: KNTK), and ExxonMobil (NYSE: XOM) made a positive final investment decision to expand the Permian Highway Pipeline. The project will increase that pipeline's capacity by 550 million cubic feet of natural gas per day. The companies signed firm transportation agreements with shippers for all the available space. They hope to complete the project -- primarily adding more compression to push additional volumes through the pipeline -- by November 2023, assuming they receive all the required approvals.
Source Fool.com
