For Kinder Morgan, the proof of increasing natural gas demand is in the pudding.

Kinder Morgan (KMI) discussed the need for natural gas capacity at its second-quarter earnings call on July 17, declaring a successful open season on a Southeast U.S. pipeline and plans to move forward on an oil-to-gas pipeline conversion in the Williston Basin.

“I'm a firm believer in anecdotal evidence, particularly when it comes from the actual users of that power and the utilities who will supply it, and from the regulators who have to make sure that the need gets satisfied,” said KMI Executive Chairman Rich Kinder during the earnings call. “And the anecdotal evidence over the last few months has been jaw-dropping.”

Kinder referred to bullish expectations in natural gas demand for a massive number of data centers analysts expect will be built by the end of the decade, as well as a forecast of LNG exports doubling over the next five years.

KMI held a binding open season that ended July 12 on the proposed South System Expansion 4 (SSE4) project, designed to add 1.2 Bcf/d to the Southern Natural Gas Line South Line in the Southeast U.S. Kinder said the season was successful and would help meet a growing need for natural gas in region.

Kinder Morgan expects to spend about $3 billion on the project, which is projected to begin service in 2028.

In the Williston Basin, which encompasses part of the Dakotas, Montana and Canada, KMI plans to convert its Double H Pipeline system from a crude to an NGL line. The project is estimated to cost about $150 million and will go into service in 2026.

But while the company builds for future gas demand, the current market continues to show weakness. Natural gas prices at the Henry Hub started the second quarter below $2/MMBtu. The price had a small rally in May, but spent the majority of the quarter under $3/MMBtu.

The weak prices ate into the company’s earnings, according to analysts.

The company’s second-quarter adjusted EBITDA came in at approximately $1.89 billion. Prior to the announcement, the average Wall Street estimate was about $1.91 billion.

“Lower earnings from KMI’s natural gas pipelines segment accounted for the miss, with segment EBDA missing our estimate by -$106MM,” wrote TPH&Co.’s Zack Van Everen in a July 18 report. TPH had forecast $1.33 billion, while the actual amount was $1.23 billion.

Traffic on the company’s pipelines remained flat year-over-year, while G&P volumes were up 10%. Core profits from natural gas lines totaled $2.5 billion, 2.5% higher than last year. However, adjusted core profits from the company’s CO2 transport fell by 6.3%, or $164 million, compared to second-quarter 2023.

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