U.S. natural gas prices have fallen approximately 24% this year, with current storage levels exceeding the five-year average. This situation is advantageous for midstream operators, whose revenues are largely derived from fees associated with transporting and processing gas.
Companies such as Kinder Morgan, Energy Transfer, and Williams are positioned to capitalize on this trend due to their extensive pipeline networks and the rising demand for natural gas, particularly from industrial sectors and data centers.
Kinder Morgan, for instance, reported record third-quarter earnings of 35 cents per share, a 21% increase year-over-year, and anticipates adjusted earnings per share of $1.36 for 2026. The company plans to invest $4.7 billion in new natural gas pipeline projects, expanding its backlog to $14.4 billion.
Energy Transfer, with its vast pipeline network, has also seen its stock rise over 20% this year, benefiting from a fee-based business model that insulates it from commodity price fluctuations. Williams, which operates the critical Transco pipeline, is similarly positioned to benefit from the growing demand for gas to power data centers, with its stock up over 17% year-to-date.
Overall, these midstream companies are well-placed to generate stable cash flows and dividends in a market characterized by low natural gas prices and high supply