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Kinder Morgan Inc. said on Tuesday it expects to generate higher income in 2021 and raised its annual dividend, as the pipeline operator cost cuts this year in the face of oil demand destruction.

Earnings at Kinder Morgan and across much of the oil industry were hit hard this year by massive asset write-downs as the pandemic crushed fuel demand, pushing crude prices to historic lows.

As the world prepares for a vaccine rollout, fuel demand has rebounded and prices are now hovering at around US$50 a barrel, and producers are resuming their shut-in drilling, improving the prospects for pipeline companies.

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Kinder Morgan, which expects net income to be just about US$100-million this year owing to large impairments, said it estimates to generate around US$2.1-billion in profit attributable to it next year.

The company expects core earnings of around US$6.8-billion next year and distributable cash flow of US$4.4-billion, it said.

Kinder Morgan said it plans to invest about US$800-million next year on expansion projects and joint ventures, which is lower than expected, according to Credit Suisse analysts.

The company raised its dividend by about 3 per cent to US$1.08 a share on an annualized basis, with US$450-million set aside for share repurchases.

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