Kinetik Approves Kings Landing Sour Gas Conversion, Guides 2026 EBITDA to $950m–$1.05bn
Kinetik reached FID on its Kings Landing sour gas conversion project to boost acid gas injection capacity at Delaware North to over 31 MMcf/d by year-end 2026, following a 99.8% runtime and doubled processing capacity. Q4 adjusted EBITDA was $252 million and DCF $152 million, with full-year EBITDA of $988 million, 3.8× leverage, $176 million in share repurchases and 2026 guidance of $950 million–$1.05 billion alongside $450 million–$510 million capex.
1. Kings Landing Project Decision
Kinetik reached a final investment decision on its Kings Landing sour gas conversion project, targeting year-end 2026 service and boosting acid gas injection capacity at Delaware North to over 31 MMcf/d. The existing Kings Landing facility operated at 99.8% runtime with strong ethane recoveries, and its full commercial in-service doubled processing capacity in the region.
2. 2025 Financial Results and Capital Actions
In Q4, Kinetik reported $252 million of adjusted EBITDA, $152 million of distributable cash flow and negative $12 million of free cash flow. For full-year 2025, adjusted EBITDA totaled $988 million; the company repurchased $176 million of Class A stock, used $500 million of EPIC Crude sale proceeds to pay down revolver debt, and ended the year at 3.8× leverage.
3. 2026 Guidance and Commercial Strategies
The company issued 2026 guidance of $950 million to $1.05 billion in adjusted EBITDA, $450 million to $510 million of capital spending and a 3.5× to 4.0× leverage target. Strategic initiatives include the on-schedule ECCC pipeline entering service next quarter, a bolt-on Barilla Draw acquisition in Delaware South, and contract amendments shifting residue gas pricing to Gulf Coast markets and adding fixed-fee structures to enhance cash flow visibility.