U.S. natural gas prices have fallen roughly 24% this year, while storage levels sit slightly above the five-year average. For midstream operators, however, the price decline translates into higher throughput volumes, and because much of their revenue derives from fee-based transportation and processing contracts, the current environment is a significant tailwind. Three pipeline operators—Kinder Morgan, Energy Transfer LP, and Williams Companies—stand out for their scale, network reach, and direct exposure to rising natural gas demand.
Cheap gas is pressuring producers, yet the pipelines that move and process that gas are thriving. When prices are depressed and supply abundant, the physical volume flowing through the nation’s pipeline network expands to meet surging demand from industrial hubs and, increasingly, artificial intelligence data centers. This dynamic places midstream infrastructure giants in a favorable position. Natural gas futures have dropped nearly 28% year-to-date, including a 15% decline this week alone, with the November contract settling at $2.65 per million British thermal units on Friday.
Typically, lower commodity prices would curb production. However, about 37% of U.S. gas output in 2024 was an unavoidable byproduct of drilling in the country’s five major oil basins, according to the Energy Information Administration (EIA). Higher crude prices have incentivized oil drilling, bringing associated gas to market regardless of gas prices or demand. Unseasonably mild weather has added to the glut, pushing storage to 3,644 billion cubic feet (Bcf) as of Oct. 16—77 Bcf higher than the prior week and above the five-year average of 3,609 Bcf.
Meanwhile, interstate pipeline construction remains constrained by regulatory litigation and environmental opposition, effectively turning existing infrastructure into a collection of high-barrier, government-sanctioned monopolies over energy flows. This supply-demand mismatch allows midstream operators to convert exceptionally high throughput into secure, fee-based cash flow and dividend distributions.
Kinder Morgan
The primary beneficiary of this dynamic is Kinder Morgan, which transports approximately 40% of all natural gas consumed in the United States. The company operates a dominant, interconnected pipeline network linking oversupplied shale basins directly to major demand centers and Gulf Coast export terminals. On Wednesday, Kinder Morgan reported record third-quarter adjusted earnings of 35 cents per share, a 21% increase year-over-year. For 2026, the company guided for adjusted EPS of $1.36 and announced $4.7 billion in new natural gas pipeline investments, bringing its project backlog to $14.4 billion—$13.2 billion of which is targeted at natural gas projects. “We continue to see significant, incremental project opportunities across our natural gas pipeline network driven primarily by power and LNG, and we will continue to pursue them aggressively,” said President Dax Sanders on the earnings call. Through Thursday’s close, Kinder Morgan shares have risen more than 23% year-to-date, prompting several Wall Street firms to raise price targets.
KMI 3M mountain Kinder Morgan stock over the last three months
Energy Transfer
Operating alongside Kinder Morgan, Energy Transfer leverages 140,000 miles of gas, oil, and product pipelines connecting major U.S. production basins to domestic utilities and international transport hubs, generating cash flows largely insulated from commodity fluctuations. Its units are up more than 20% year-to-date. Energy Transfer offers a compelling total-return profile, combining a market-leading 6.5% distribution yield with an aggressive consolidation strategy. Ninety percent of its business is fee-based. The master limited partnership (MLP) structure provides the liquidity of a public stock with the tax advantages of a private partnership—MLPs pay no corporate income tax, passing the majority of cash flow to investors who bear the tax liability. Energy Transfer trades at a substantial discount to peers due to higher leverage and its complex structure.
ET’E 3M mountain Energy Transfer stock over the last three months
Williams Cos.
Rounding out this elite tier is Williams, whose irreplaceable Transco pipeline system serves as the primary artery feeding the booming, high-demand data center corridors in Virginia and the southeastern U.S. As technology giants build out gas-fired generation to power massive AI clusters, they are heavily dependent on Transco’s capacity. Williams shares have gained more than 17% year-to-date.
WMB 3M mountain Williams stock over the past three months
By capturing predictable fees on a massive, permanent baseline of low-cost American energy, these three midstream powerhouses represent a high-quality structural play for investors seeking exposure to the intersection of energy infrastructure and digital demand growth.
