DT Midstream (NYSE:DTM) reported first-quarter financial results on Thursday. The transcript from the company’s first-quarter earnings call has been provided below.
This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.
View the webcast at https://events.q4inc.com/attendee/436325929
Summary
DT Midstream reported a strong start to 2026, driven by high demand and cold weather, reinforcing their full-year plan.
The company announced investments in two new pipeline projects: Vector Pipeline expansion and Millennium R2R, supported by long-term contracts.
DT Midstream is engaged in active commercial discussions for potential pipeline expansions in response to strong market demand.
Q1 2026 adjusted EBITDA was $308 million, a $15 million increase from the previous quarter, with growth capital investment at $72 million.
The company reaffirmed its 2026 adjusted EBITDA guidance and highlighted strategic expansions to meet growing energy demands.
DT Midstream emphasized the importance of US LNG as a stable energy supply source amidst geopolitical developments.
The company maintained its quarterly dividend of $0.88 per share, aligning with adjusted EBITDA growth.
Full Transcript
OPERATOR
Welcome to the DT Midstream First Quarter 2023 Earnings Call. My name is Rebecca and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the Speaker’s remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press STAR followed by the number one on your telephone keypad. If you would like to withdraw your question, press Star one again. I will now turn it over to our Speaker, Todd Lormar, Director of Investor Relations. Please go ahead
Todd Lormar
Good morning and welcome everyone. Before we get started, I would like to remind you to read the safe harbor statement on page two of the presentation including the reference to forward looking statements. Our presentation also includes references to non GAAP financial measures. Please refer to the reconciliations to GAAP contained in the appendix. Joining me this morning are David Slater, Executive Chairman and CEO Chris Zona, President and COO and Jeff Jewell, Executive Vice President and CFO. So with that I’ll go ahead and turn the call over to David.
David Slater (Executive Chairman and CEO)
Thanks Todd and good morning everyone and thank you for joining. During today’s call I’ll touch on our financial results and provide an update on the latest commercial activity and our growth projects. I’ll then close with some commentary on the current market fundamentals before turning it over to Jeff to review our financial performance and outlook. So turning to our financial results, we’re off to a strong start in 2026 fueled by a strong demand and cold winter giving us confidence in our full year plan. We continue to advance organic opportunities from our 3.4 billion project backlog in a very strong market environment that supports our future growth. We are announcing today that DTM has approved investment in two new projects in our pipeline segment. The first is a mainline expansion of Vector Pipeline which increases the total capacity of vector by approximately 400 million cubic feet per day and is anchored by investment grade utility customers under 20 year negotiated rate contracts with a Q4 2028 expected in service. The next project DHAM has approved investment in is Millennium R2R which is supported by long term contracts with two utilities and an existing power plant for 70 million cubic feet per day of capacity and is expected to be fully in service in Q1 2027. These investments are supported by strong market fundamentals backed by utility and power generation customers and will serve the growing demand in the upper Midwest and New York and New England markets. In addition, we have entered into an agreement to build a pipeline lateral to serve a new utility scale power development located just off Midwestern Pipeline in Indiana where the developer plans to construct a 900 megawatt power plant which we expect to serve under a 20 year demand based contract for approximately 265 million cubic feet per day of capacity. This project is subject to our customer reaching FID in the power plant which we expect to occur in 2026. Our expected lateral pipeline and service date is in the first half of 2028. Also on Midwestern, we recently recontracted approximately 30% of the system’s capacity with term extensions ranging from 5 to 25 years, reflecting the importance of this critical capacity and how the market values it. Finally, we commercialized a new interconnect on Nexus this quarter which will have a capacity of 250 million cubic feet per day and will provide supply for a behind the meter natural gas fired power generation facility to power a new data center in Ohio. Adding this load to the mainline of Nexus strengthens the asset over the long term. We are also seeing strong market interest for additional pipeline projects in the Midwest and Northeast and are advancing these potential opportunities towards commercialization. Midwestern Pipeline closed a successful non binding open season at the beginning of April for both northbound and southbound expansions to increase capacity by up to 1.5 billion cubic feet per day and I’m pleased to report that the open season was oversubscribed. Vector Pipeline also recently closed a non binding open season for the 2030 expansion project to to increase westbound capacity into Chicago by 300 to 500 million cubic feet per day which received very strong customer interest and was also oversubscribed. Our next steps with these two projects are to optimize the pipeline and facility design based on the customer requests and then to work with our customers to reach binding commitments. We will keep you updated as we continue to progress these opportunities. Turning to our construction activity, our Midwestern gas transmission power plant lateral to serve AES Indiana’s gas fired power plant was placed in service on time and under budget with commercial operations expected to begin in Q2 this year. All of our other in flight growth investments remain on track and on budget. Finally, I’d like to take a moment to address the recent market movements and the global geopolitical situation. The first quarter of 2026 was a volatile period for the market with significant cold weather in January driving extreme prices across the country, highlighting capacity constraints in the North American market driven by demand growth, followed by geopolitical developments in the Middle east that are contributing to the broader energy market instability. These events have renewed both domestic and global focus on reliability and security of supply. Internationally, the discussion has largely centered on oil, yet curtailed and constrained LNG volumes from the Middle east region have underscored the value of US LNG as a stable and dependable supply source. We believe this dynamic will favor increased LNG exports from the US Gulf coast and create additional expansion opportunities for US based supply which our Haynesville system is very well positioned to serve. With its high degree of both receipt and delivery connectivity. Our LEAP pipeline is currently running full at its design capacity of 2.1 billion cubic feet per day and has the ability to expand to 4 billion cubic feet per day. Turning to the domestic front, we are seeing growing energy reliability and affordability concerns across many regions. With much of the pipeline infrastructure operating at maximum capacity, many regions cannot access low cost supplies of natural gas produced domestically in our prolific production basins, which highlights the need for incremental natural gas pipeline and storage investments to unlock these low cost supplies. In the Midwest and Northeast, power demand fundamentals continue to strengthen. Driven by data centers and other large load customers, utilities in these regions are converting potential opportunities into signed load more quickly than previously expected, with multiple gigawatts of contracted demand now backed by binding agreements and capital plans that materially increase peak load projected through the end of the decade. With large load tariff frameworks in place to protect affordability, this level of growth is evolving rapidly. As construction is underway, energy is flowing to some projects such as Phase one of Microsoft’s Mount Pleasant Data center in Wisconsin, reinforcing our growth outlook for increased gas fired generation and natural gas demand. Our interstate gas pipeline footprint is strategically located in this region to serve this growth and the strong response to the recent open seasons on Midwestern and Vector pipelines support these fundamentals. I’ll now pass it over to Jeff to walk you through our quarterly financials and outlook.
Jeff Jewell (Executive Vice President and CFO)
Thanks David and good morning everyone. In the first quarter we delivered adjusted EBITDA of 308 million, representing a 15 million increase from the prior quarter. Our pipeline segment results were 14 million higher than the prior quarter, driven by seasonally higher EBITDA from our joint venture and Interstate pipelines and higher revenue on Stonewall and Leap. Gathering segment results were 1 million greater than the prior quarter, reflecting higher volumes on Blue Union and Appalachia gathering. Growth capital Investment for the first quarter was 72 million, which is in line with our plan and we expect a ramp in growth capital weighted towards the second half of this year. Operationally, total gathering volumes increased in both regions from the fourth quarter. Haynesville volumes averaged 2.09 bcf per day, driven by new volumes and recovery from upstream maintenance completed in the fourth quarter. In the Northeast, volumes averaged 1.42 bcf per day, driven primarily by the Stonewall Mountain Valley pipeline expansion that was placed into service at the beginning of February. As we look at the balance of the year, we expect the second quarter to be in line with our full year guidance, but to be lower than the strong first quarter driven by seasonality across our interstate pipelines, including JVs, a rate step down on Guardian Pipeline and typical seasonal planned maintenance. We remain confident in our full year outlook and reaffirm our 2026 adjusted EBITDA guidance range and our 2027 adjusted EBITDA early outlook. As David mentioned, DTM has approved investment in the Vector 2028 pipeline expansion and we expect total DTM investment of 80 to 100 million for the project. DTM has also approved investment in a millennium R2R project which will be completed under our existing regulatory authorization. We’ve increased our committed capital in 2026 and 2027 to reflect these new investments. 2026 is approximately 400 million and 2027 is approximately 440 million. Finally today we also announced that our Board of Directors approved our first quarter dividend of $0.88 per share, unchanged from the prior quarter and we remain committed to grow the dividend in line with adjusted ebitda. I’ll now pass it back over to David for closing remarks.
David Slater (Executive Chairman and CEO)
Thanks, Jeff. So in summary, we remain confident in delivering on our guidance, continuing our track record of strong performance we’ve maintained since we spun the company in 2021. Our high quality pure play natural gas pipeline asset portfolio is very well positioned to take advantage of growth opportunities across our network as we execute on our large organic project backlog. The fundamentals supporting natural gas infrastructure remains stronger than ever with a broader realization of the key role US LNG will need to play as a reliable and stable global energy supply and accelerating power generation needs in the Midwest and Northeast, including data center driven load. And with that we can now open up the line for questions.
OPERATOR
At this time I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We’ll pause for a moment to compile the Q and A roster. Your first question comes from the line of Michael Bloom with Wells Fargo. Your line is open.
Michael Bloom (Equity Analyst)
Thanks. Good morning everyone. Wanted to start with the MIST project. Wonder if you can just give us a little more detail in terms of where you see progress to fid Anything you can say in terms of the size of the project, how it’s scoping in terms of capital. And then would you expect this project to be expanded in phases or you think it’s going to be one big expansion?
David Slater (Executive Chairman and CEO)
Morning, Michael. Great question. I’d say let me start at the highest level and then I’m going to pass it over to Chris for a few of the details. Really strong market interest in that open season. You know, we were offering both northerly pathways and southerly pathways. I think as we’ve talked in the past, Midwestern follows a corridor of power generation between Chicago and Nashville. So there’s tremendous power generation assets and infrastructure in that corridor. You know, we can talk about what we announced today on the power generation side on Midwestern. I, you know, I think the big takeaway is that we’ve attached, you know, 565 million a day of power generation load to Midwestern in the last 12 months, which is material. So really strong market interest. Very consistent with our thesis, our fundamentals thesis that we’ve been sharing with the investors. And maybe I’ll pass it over to Chris Zona to talk a little more detail around what I’ll call the nuts and bolts of the project.
Chris Zona (President and COO)
Yeah, sure. Thanks, David. Yeah, and so it’s early. I’ll start with that, Michael. You know, right now, you know, we are in the process of, okay, we, we’ve got the fantastic response here to the open season again, you know, electric and gas utilities, data center development, generation, power generation, all the above. And recall really this NIST expansion is really trying to put a box around, you know, the needs in the, in the early cycle here, the 2930 time frame and how do we help kind of quantify what that really looks like for those customers and then, you know, go through the detail engineering, get through the kind of solution and then progressing those conversations to FID or you know, binding PAs that can lead to FID. And that’s the process that will be in here in the next few months here with the shippers. We’ve already started those conversations and we’ve already had our customership for meeting started this week. And I expect you over the next few months we’re going to be going through that in more detail. But again, as David mentioned, really exciting demand on both the northbound path and the southbound path.
Michael Bloom (Equity Analyst)
Great, thank you for all that. Appreciate it. Then, you know, interesting comment on this. Interconnect on Nexus to server behind the meter project. You know, there’s, we’re starting to see some pushback from, you know, to data center Development from, you know, both politicians and some local communities. So curious. Just get your latest thoughts in terms of how you think the behind the meter opportunity set is shaping up. I know that was something you talked about a long time ago and it sort of went quiet a bit, but maybe, maybe it’s picking back up.
David Slater (Executive Chairman and CEO)
Yeah, I think our, our view on the, what I’ll call the aggregate power demand, low growth. Generally speaking, the utilities are winning more than the independent developers. I’ll just start there. We’re seeing that across the footprint. Ohio, this particular project in Ohio is well into construction and will go commercial very shortly. And that’s just an example …
This post was originally published here
