Kinder Morgan (KMI -0.11%) is the undisputed leader in natural gas infrastructure. The company owns and operates 70,000 miles of pipelines, giving it the largest natural gas network in North America. It transports 40% of the natural gas consumed in the U.S. each day. 

The natural gas infrastructure giant expects demand for that clean-burning fuel to continue rising. A big driver is the surging demand for liquefied natural gas (LNG) in Asia and Europe. The pipeline company therefore expects to continue investing money to expand its infrastructure. That should enable it to grow its cash flow and dividend in the future.

Drilling down in the LNG opportunity

Kinder Morgan's co-founder Richard Kinder recently discussed the opportunity his company sees for natural gas on the third-quarter conference call. He pointed out that the company is fortunate to have a large portion of its natural gas pipeline infrastructure in Texas and Louisiana. That's because it's "where so much of the demand for additional throughput, particularly natural gas, is located." Kinder noted that: 

The demand for natural gas in those states is projected to grow enormously over the rest of this decade. That growth is driven by a number of end users but let me just focus on LNG export facilities. Year-to-date, in 2022, LNG is consuming over 11 Bcf a day...According to the S&P Global LNG forecast, that number is predicted to grow to 22 Bcf a day by 2027 as new facilities come online. That's virtually doubling the current demand, which has already grown by 400% in the last five years. We project that after '27, LNG demand will continue to grow and expected to be 28 Bcf a day by 2030.

Kinder Morgan currently moves about 50% of the gas consumed by LNG facilities. It expects to maintain or grow that market share in the future. That suggests the company will continue to invest in expanding its infrastructure to support this demand. These expansion-related investments will supply incremental cash flow as they come online, which could give it the fuel to continue growing its dividend.

Capitalizing on the LNG opportunity

Kinder Morgan has secured several projects this year to support growing LNG demand. It approved a 550 million cubic feet per day expansion of its Permian Highway Pipeline to move more natural gas from the Permian Basin to the Gulf Coast. It's investing $150 million in a project that should enter service by November of 2023. It's also building the Evangeline Pass system to serve Venture Global's Plaquemines LNG facility in Louisiana.

Richard Kinder expects his company to "announce additional projects in the coming months. When you add the increasing need for natural gas for industrial uses, electric generation, and exports to Mexico to that massive LNG demand, the result is an enormous opportunity to grow our system in a capital-efficient manner, which in turn will grow the value of our company."

The company sees several types of LNG investment opportunities. CEO Steve Kean noted on the call that there would likely be "a fair number of $150 million to $300 million projects" to expand existing systems in a capital-efficient manner. For example, it's pursuing an up to 570 million cubic feet per day expansion of its Gulf Coast Express pipeline to transport more Permian gas to the Gulf Coast. It's also working with other LNG developers to build pipelines connecting interstate systems to their export facilities.

In addition, "there could be some bigger ones," stated Kean. For example, it's engaged in commercial discussions on a new large-scale greenfield pipeline project to move additional Permian volumes. It forecasts that the industry will need additional pipeline capacity sometime in the 2025 to 2026 timeframe. 

Meanwhile, Kinder Morgan could expand its Elba LNG export facility in Georgia. It recently took advantage of the demand for LNG assets by selling a 25.5% stake in that project for $565 million to enhance its financial flexibility. However, the company maintained the right to expand that facility. It has room to build an additional 5 million tons of annual LNG export capacity, which could triple its size. It's currently in the early stages of evaluating that expansion opportunity. 

The fuel to keep growing

Demand for natural gas should continue growing in the coming years, mainly fueled by new LNG facilities that will come online along the Gulf Coast. That should give Kinder Morgan more opportunities to expand its already extensive pipeline network. Those projects should help grow the company's cash flow, giving it more fuel to pay dividends. Add that upside to its over 6%-yielding payout, and Kinder Morgan could produce attractive total returns for investors in the coming years. That makes it a compelling option for those seeking income with upside potential fueled by the LNG boom.