South Texas proved to be a sore spot for Kinder Morgan Inc. (KMI), as the company’s 2Q2021 earnings took a hit during an otherwise strong period in which the midstream giant made two substantial purchases.

Houston-based KMI recorded a $1.6 billion, non-cash impairment related to anticipated lower volumes and rates on contract renewals on its South Texas assets. However, the natural gas pipelines, products pipelines and terminals all contributed stronger results, and the company is looking to enhance its service offerings with the two recently completed acquisitions that CEO Steven Kean said further strengthen KMI’s interconnected network of assets, but also position the company for participation in the energy transition.

“We continue to see strong long-term value in the...