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Midstream Pipelines Fuel Income Growth in 2026
27 Aug
Summary
- Major US pipelines see increased volumes from LNG and data centers.
- Enterprise Products Partners (EPD) reported record EBITDA in Q2 2026.
- MPLX offers 12.5% annual distribution growth, the highest in its group.
The US midstream energy sector is experiencing a significant upswing, buoyed by rising natural gas volumes for LNG exports, growing data center power demands, and expansion in the Permian Basin. These factors are boosting throughput on major pipelines, translating into reliable income streams for investors.
Enterprise Products Partners (EPD) demonstrated robust Q2 2026 performance, reporting a record $2.8 billion in adjusted EBITDA and $2.5 billion in adjusted cash flow from operations. With 1.9x distribution coverage, EPD is well-positioned to continue increasing its payouts, evidenced by a recent 2.8% hike in its quarterly distribution for Q2 2026.
MPLX, an affiliated partnership, is highlighted for its exceptional distribution growth, projecting a 12.5% annual increase through 2027. This growth is supported by strong EBITDA and a targeted coverage ratio, with significant investments in natural gas and NGL infrastructure, including a forward-pulled Gulf Coast fractionation project.
Kinder Morgan (KMI) offers a simpler C-corp structure and a substantial project backlog, primarily focused on natural gas infrastructure to meet rising demand from power generation and LNG exports. While its dividend growth of 2% is more modest, KMI provides stability and a clear tax advantage for investors preferring a 1099 form.
