Our next presenter is Kinder Morgan, who was the first to self-fund their equity and even debt needs since early 2016. The company is now on top of their four and a half times leverage target and has a healthy organic backlog. We welcome Steven Kean, CEO, Anthony Ashley, Treasurer and Vice President of Investor Relations, and Peter Staples, Director of Treasury.
All right. Thank you, Ross. All right, I'm going to give you a brief overview of the company. Of course, many of you are familiar with it. I'm going to talk about our 2018 performance. 2018 was a pivotal year for the company, both in terms of the progress that we made on the balance sheet. Actually exceeded our year-end objectives for that as a result of the Trans Mountain expansion. Also pivotal in terms of our financial performance, our ability to continue to add projects to our backlog. Just a very good year. I'll go through that. 2019 guidance we provided on Monday, I'll go through that briefly as well, then talk about a few key market developments that are driving the value of our network and project opportunities. The company, it's a large North American midstream energy company. That's our sector. It's conservatively capitalized.
Our commercial model is that we enter into long-term contracts where we get paid primarily on a reservation fee basis. Two-thirds of what we get is take-or-pay. Two-thirds of our revenues are take-or-pay. That's happening regardless of what the underlying commodity price is. That's regardless of what the underlying basis is. Often regardless of usage as well. We have a very secure commercial model, where we contract the capacity out to our customers. We manage this company with discipline.
We're very focused every week, every month, every quarter, all of our annual process to make sure that we're focusing on the strategy for the company, how we're advancing our projects, how we're advancing the commercial opportunities that we have, how we're managing our operations for safe, reliable, efficient operations, how we're managing our capital structure, what's going on in the capital markets, what's going on in the markets that we serve. We're fully aligned with 14% management and board ownership of the outstanding equity of KMI. A good company that's in really a great place right now. When you look at midstream North American energy infrastructure, we are producing more and more of the crude, the NGLs, and the natural gas and refined products that not only that we need in the United States, but that we need around the world.
That production needs to get from where it is to where it's needed, and that means midstream infrastructure, transportation, and storage. That's the business that we're in. Natural gas, which is the biggest part of our business at 56% of our segment EBITDA, but also in terms of liquids assets, refined products, crude, and NGLs. We provide the services that people need to get those commodities to market. North American production is growing. Natural gas in particular. North American demand is growing, but export demand is growing. Our network of natural gas assets is seeing increased utilization, and improvement on our contract renewal rates. We're in a great place, and we serve this market with an irreplaceable network, best natural gas pipeline network in the U.S. We have a leading position in all of our businesses.
We are weighted to natural gas, and we're not dependent on any particular basin, or any particular commodity for our results. We are a diversified play on North American energy as well. We're a large cap, $40 billion in market capitalization, liquid security. We're conservatively capitalized. We're placed on positive outlook now for an upgrade to mid-triple B, as we sit at triple B minus right now, by all three rating agencies. In a positive outlook from all three rating agencies. We have budgeted, so this is a 2018 look, $7.5 billion of adjusted EBITDA, which we expect to exceed this year. We have 25% dividend growth that's coming in 2019 and 2020, and we just reaffirmed that guidance for 2019 with $1 in declared dividends over the course of 2019. We have a $2 billion share buyback program.
This year, we're blessed to have a lot of projects, there's probably not as much room other than event-driven things for share buybacks. We have good opportunities to deploy our capital in projects that deliver us a better return. We have a $2 billion share buyback program over 2018, 2019, and 2020. We've used $500 million of that capacity to date. Large cap, liquid, conservatively capitalized, management alignment with our shareholders, and we're growing and returning value to shareholders through our dividend program. We're delivering on our objectives, de-levering the balance sheet. We exceeded that objective. Let's go back in time. Since 2015, we have reduced debt by over $8 billion. We've gone from a multiple of debt to EBITDA of 5.6 times to the mid-fours. Our guidance for 2019 is to be 4.5 times.
Our guidance for 2018 was to be at 5.1 at the end of the year. We've exceeded that, primarily as a result of the Trans Mountain transaction. We've now achieved our long-term leverage target of around 4.5 times. Really great progress on de-levering the balance sheet. We found additional high return capital projects to invest in. We have over $6 billion of commercially secured capital projects. We were able to find additional opportunities, in terms of the larger opportunities, primarily in the Permian, moving natural gas from the Permian Basin over to our best-in-class Texas Gulf Coast intrastate market system, and more on that in a moment.
We generally expect, though this is a bit of a SWAG, we generally expect that based on our network and based on what's happening in North American energy, we're going to be able to identify $2 -$3 billion of additional expansions of CapEx every year. This year, we're at the high end of that. Coming into 2019, we're at the high end of that at $3 billion. We're a little over $2 billion for 2018. We're returning cash to shareholders, a 60% year-over-year increase in our 2018 dividend. We announced mid-year last year that we would increase that by a further 25% in 2019, and 25% again in 2020. A rarity in our industry, in our sector, we also have a share buyback program that's been approved by the board as well. We've had strong operational performance. We expect to exceed our 2018 financial objectives.
Again, we've well exceeded our leverage targets. We resolved the Trans Mountain issue with a sale of that asset and the expansion on reasonable terms that reduced risk to KML, but also allowed us to significantly reduce debt at KMI. We found new growth opportunities, especially in our natural gas network. All right. Here's the guidance that we announced after market close on Monday for 2019. $7.8 billion of adjusted EBITDA, which is a 4% increase from the 2018 budget, which again, we expect to exceed. The differential between 2019 budget and forecast in 2018 will be a little bit less, but we are comparing here to the 2018 budget. DCF of $5 billion, which is up 10%. DCF per share of $2.20, which is up 7%.
That's in spite of the fact that we sold the ongoing Trans Mountain pipeline business in the current year. Meaningful growth notwithstanding the fact that we sold a cash flowing segment in 2018. Dividend per share of $1, again, 25% above where we were for this year. Growth CapEx of $3.1 billion. The $3.1 billion includes our backlog. The portion of our backlog that is being spent within 2019. It also includes, and we'll provide more updates on our guidance when we have our investor conference in January. It also includes investments that we added or projects that we added during the budget process for 2019. Those tend to be smaller, numerous but smaller capital investment opportunities. It includes our contributions to joint ventures.
Joint ventures in terms of funding expansion projects like our two Permian projects, but also any capital that we inject into existing joint ventures, for example, for debt paydown. The vast majority of this $3.1 billion is being deployed to new capital projects, new growth projects in the business. A 39% increase year-over-year. In that number, we expect to end the year with a 4.5x net debt-to-EBITDA, and we expect to use the internally generated cash flow from our business, that $5 billion, to fund the dividend and to fund the vast majority of this project spend. We're funding all of the equity component and even the majority of what we would think of typically as a debt component of those capital investments all being self-funded.
We have no need to access equity markets in 2019 and plenty of capacity to handle our debt maturities in 2019. On KML, CAD 213 million of adjusted EBITDA, DCF of $109 million, DCF per share of $0.90 with the dividend flat to 2018 of $0.65. We continue to find additional growth projects in Canada on the remaining midstream assets that we have there, $32 million expected. A very low leverage entity, 1.3 times net debt to EBITDA. Our BTT, Base Line Terminal project in Edmonton, is now complete in terms of being commercially in service. A little bit of trailing capital and cleanup work, but came in ahead of schedule and under budget, which is a nice accomplishment in Edmonton. We've identified an additional expansion and put it under contract in Vancouver Harbour. That's our 2019 guidance.
We've got significant cash flow, and we've used that to make the transition, as Ross pointed out, very early in the cycle. Instead of issuing additional equity to fund our growth, to self-fund our growth, rather than issuing equity at what we found to be very unattractive valuations. We've issued zero equity since really Q3 of 2015, and we don't have any expectation of issuing additional equity in the foreseeable future. We've got a best-in-class dividend coverage of 2.6 times. As we've said before, we plan to apply at KMI the Trans Mountain proceeds, which will be distributed in early January of 2019 and amount to $2 billion to KMI's 70% share to reduce debt. That's what takes us down to the 4.5, 4.6 times. That strong balance sheet gives us the flexibility to pursue multiple opportunities. We're on positive outlook now by S&P, Moody's, and Fitch.
We expect to get an upgrade based on their public statements from S&P in January when the proceeds are distributed. We have very manageable future debt maturities, and we got $4.5 billion worth of capacity. The way we think about things here, the order of operations for us as we're thinking about capital allocation is, first you've got to have the balance sheet in a place where you want it. We're there. The indications from the rating agencies that they concur with that view. We've got a great set of assets. It easily supports at a mid-triple-B rating the debt level that we have. Get the balance sheet in the right place and keep it there. Second, use the excess cash flow that we generate to cover the previously announced dividend. We're obviously self-funding that dividend.
The remaining cash flow can go for projects or to share buybacks, and we make that decision based on the return opportunity. As we've looked at different scenarios on projects and return hurdles on projects and the project returns that we're able to get out in the market today, typically those returns, based on the opportunities that we have, look better than the returns, even though we find today's share price an attractive valuation to be using the share buyback program. The returns on the projects are better. Having those high-returning projects is a good thing, and we're happy to deploy our capital to them. You see on the right, the excess cash flow generation that we've experienced. You see also in the lower box what the debt maturities are.
We typically run at the $2.5 -$3 billion of maturities per year. We want to generate predictable fee-based cash flows to you. We have stable fee-based assets, 96% of what our budgeted segment earnings before DD&A are either fee-based or they've been hedged. 66% of the total is take-or-pay. We have secured our cash flows with the way we use our commercial model. We've gotten our cash flows either fee-based or hedged. We're a market leader in each of our business segments. We're a safe, efficient, and reliable operator. We have a great footprint, and that footprint allows us to deploy capital. There's a lot of competition in our sector right now, and you all know it. There are a lot of people running around investing in midstream assets.
It's interesting to us that many of those investments are being made at multiples in the private capital markets that are better than the multiple we experience in the public capital markets. Nevertheless, there's a lot of competition for the kinds of things that we invest in. However, the network that we have gives us a very distinct advantage so that we are able to deploy capital. Notwithstanding that competitive environment, we're able to deploy capital in terms of extensions off of our network at returns that we find very attractive. We've set kind of a 15% starting point for the discussion, unlevered after-tax return, though we will flex down for that for the right set of projects. We have a good hurdle rate.
We're able to find projects at those kinds of returns, even though other people are accepting lower returns to invest in our sector, and it's a function of having the kind of network that we have. Again, $2 -$3 billion a year of opportunity is kind of our guess at the range. We've got a backlog of over $6 billion, which is predominantly weighted to natural gas. A little over 70% of that is in natural gas. We have good financial flexibility. We were an early adopter of a more simplified C- corp structure. We can meet our investment needs with internally generated cash flow. We have a good short-term borrowing capability, et cetera. As I said, we're aligned with and transparent to our investors. We've got a 14% equity stake when you combine Rich's stake, the other board members, management of KMI. Very aligned.
I receive $1 a year in salary, no cash bonus opportunity. I get paid in the securities of the stock that many of you own, and I am aligned with the interests of our shareholders. We tie our performance throughout the organization to the achievement of our financial objectives and our operational and safety objectives. I think we've got a very well-run company. We've got a great set of assets that's run in a very disciplined way. We're disciplined with our capital. We're disciplined in our operations. We're disciplined in the way we prosecute our projects, in the way we measure our project from week to week and month to month and quarter to quarter and year to year. Disciplined with the way we budget. We're very precise, very focused on the business. We go to work and work hard for you every day.
We're well positioned, specifically with respect to natural gas. We have a great position on our assets, where they're located, what they connect to and what they connect those supply basins with, and I'll go into a little more detail on that. On the table on the right, you can see something. This is the very dramatic change that we've been seeing in gas supply and demand in the U.S., and it's really a function of what the producers have been able to accomplish, what our producer customers have been able to accomplish. They've gotten more efficient. They've lowered their breakeven prices. They've gotten better and better and better at finding and producing the stuff. That feeds our business because we move it for them and get it to market. The other big component is, of course, the export demand.
That's a function of us being able to find and exploit this resource in an increasingly efficient way. It's also a function of the fact that we have a great midstream infrastructure in North America that gives people who come to our shores the ability to access multiple producers, find multiple paths in order to get their product to market, et cetera. We're growing. We're benefiting from the growth in both supply and demand on both ends of our system, and I'll talk about specifically Texas in a minute. LNG exports, the biggest contributor over the 10-year horizon that's shown here, going from two BCF a day in 2017, of course, we're over three right now, up to 15 BCF in 2027, a 650% increase. Power growing from 25 - 32. I will point out that we're at 29 BCF a day today. We've already grown fairly dramatically.
I think WoodMac does an outstanding job. If there's one place that they've historically underestimated the natural gas growth in terms of serving the power sector. We continue to see that, see growth in industrial, et cetera. If you look at this year, just look at 2017 - 2018, we have grown by 11.5% year-over-year. In 30+ years of being in this business, I've never seen that in the U.S. Not only that, but there is more coming. You look at 5%-7% increases over the next two years. Again, very big numbers. That's doing two things. One is it's filling up our existing network, and that benefits us in terms of the renewal rates on existing and expiring contract capacity, allowing us either to increase our rates or to get longer term.
Our contract tenor is moving up on some of our big assets, and we're seeing renewal rates improve. That's the existing network, and that's largely without capital investment. There's capital investment in reliability and doing the compressor overhauls, et cetera, that we need to do in order to accommodate that additional throughput. That's sustaining capital, not even counted as expansion capital. The other thing it does is it feeds the opportunity for us to pursue additional growth projects. We're doing it in the Bakken. We're doing it in smaller pieces along our Tennessee system, our NGPL system, EPNG. The biggest example is in our Texas intrastate business, where we, in less than six months, less than nine months, we FID'd two new two BCF pipeline projects from the Permian to the Gulf Coast.
Here's our natural gas network with the overlay of the major supply basins, also the major market hubs. You can see that we hug all the major supply basins, and we surround all the major market hubs, including particularly along the Gulf Coast, which is where exports are growing to Mexico, and exports are growing in the form of LNG off of the coasts of Texas and Louisiana. We attach to the Permian our EPNG system, our NGPL system, our Texas intrastate system, a little bit today, more when we get the other two pipeline projects in place. Our Tennessee system runs through the Marcellus and Utica. We have gathering assets and downstream pipeline capacity on accessing the Haynesville. We access the DJ Basin in Colorado, the Bakken in North Dakota, which is a growing supply source for us.
We're attached to power demand, we've experienced dramatic increase in power demand, increase in exports, et cetera. We're well connected to the key supply and demand centers. We've got the largest transmission network in natural gas. We've got the largest storage position in natural gas, and well positioned to benefit from that story as it continues to evolve. If you look at our overall backlog, you'll see that 71% of it is in natural gas at about a 5.4x EBITDA multiple. That's a mix of supply push from the producers needing to find outlets for their gas, particularly in the Permian, and also demand pull on LNG power generation, et cetera. We've got $4.6 billion of our $6.5 billion backlog is in natural gas. The other segments backlog includes about $1.3 billion for CO2, EOR, $400 million for the S&T part of that business.
Completing the build-out that we've done in terminals and products in the last couple of years, relatively modest, at least for 2019. We're looking at other opportunities, but relatively modest in terms of refined products part of the backlog. We're looking to develop more there as well. U.S. LNG exports. You see the 10 BCF that's already under construction. It's been permitted. It's been FID'd. It's getting built out now. KM supplies 42% of the current U.S. liquefaction capacity, and we do so under long-term contracts. We're developing LNG under a long-term contract with Shell at Elba. A big part of our participation in this trend is that we're providing the infrastructure that's upstream of the LNG facility. As you see on the lower right, 4.5 Bcf of contracted capacity and a very capital efficient $900 million devoted to providing the transportation and storage.
Storage was purchased out of existing inventory, providing the transportation and storage to LNG at an 18-year average term. It's a very good market for us. We participate in a big way in the international gas market, and we do it from the United States of America. We think that's a good way for us, in particular, to approach that business. As I pointed out, we've made a lot of money in Mexico without being in Mexico. We provide a lot of the upstream infrastructure capability that serves that market, and we think that's a good, stable, predictable way to benefit from the growth in exports. This is our Elba Island LNG facility, again, under a 20-year contract with Shell. You see the capital numbers there, $745 million to KM's share on the liquefaction facility.
We have a joint venture partner there, $430 million is on our 100% owned terminaling facilities. This is a different LNG thing and not the huge trains, but small modular infrastructure that may be a trend for the future as well. We have a 20-year take-or-pay contract with Shell, 70% of the economics or 70% of the revenue is associated with getting the first of those 10 units online. We've said we've had a delay on this project. We were originally going to get it in the third quarter of 2018. We're now projecting the Q1 of 2019. I think we have some risk there, but I think we went about this the right way. We got an EPC contractor, we're largely insulated. Normally, delay means higher cost. We're largely insulated from that impact with our contract there. We are delayed.
Notwithstanding that delay, by the way, we're still beating our 2018 budgeted numbers. Notwithstanding the sale of Trans Mountain, by the way, we're still beating our 2018 budgeted numbers. We have a delay, but I think we're going to be all right from a cost standpoint. We currently project getting that first unit in service in Q1 of 2019. The Permian. Story in the Permian. Dramatic production growth. Natural gas demand growing at 64% from December of 2016 to October of this year. Oil growing dramatically as well, the gas producers just need to find a way to get it out. We were doing some looking at what the value to our customers of this project is. At $3 gas, that 4 BCF is worth about $4 billion a year. The oil associated with that gas is worth about $48 billion a year.
There is an imperative to get gas takeaway capacity in place. We put two projects under long-term contract, 100% under 10-year contracts. If you look at the projections, and they're just projections, but if you look at the projection, they predate the latest move that we had in oil prices. If you look at the projections for Permian capacity, the associated gas, the gas associated with the oil that's being produced in the Permian would require a 2 BCF pipeline a year going forward. We've got one that comes on in 2019. We've got the second project which is coming on in 2020. There is work underway to potentially have a third pipeline project. This gas needs to get taken away; it's not going to California.
It's going to go to where the market is, that market is in Texas, particularly on the Gulf Coast. Here's our first project. This is going in in 2019. We own 50% of it. DCP and Targa are our other joint venture partners. Apache, one of our big shippers, one of our anchor shippers, has an option on 15%, that would take us to 35%. A 2 BCF project, $1.75 billion in capital in service in October of 2019, all under 10-year contracts, coming to our Texas intrastate system. This is the supply and demand opportunity in Texas, part one. Here's part two. We also FID'd a project that's under long-term contract, fully committed under long-term contract. The Permian Highway Pipeline, another 2 BCF a day, another $2 billion in capital. This one coming online in late 2020.
Let's talk about what this means to us overall. We're going to bring our current Texas intrastate system, which we think, frankly, is the best-connected network on the Texas Gulf Coast. That system takes the gas into the system, delivers it to the industrial markets, the petchems along the Gulf Coast, delivers it to power generators, delivers to Mexico, delivers to the LNG facilities. This is a well-situated asset, and it has become increasingly complex and diverse over the years. There are rich gas system components of this that move rich gas to our processing facilities. There are dry gas components of it. It flows in both directions, north and south, in order to be able to accommodate the market growth that we're seeing on both ends of this pipe. These two projects are going to bring 4 BCF a day into that system.
That system is a non-jurisdictional system. We do purchases and sales of gas and optimization in that system. We have a significant storage position, nearly 130 BCF a day of natural gas storage. The system today is about 5 BCF a day. We have some debottlenecking expansions that are included in our economics on this asset, and with incremental revenue associated with those debottlenecking expansions to allow the producers bringing that 4 BCF a day to get to Mexico, to get to the LNG facilities, and to get to interstate markets as well. 4 BCF a day coming to a system that runs 5 BCF a day today. We are going to have opportunity here, and this is an opportunity that's taking place outside of the FERC Form 501-G process. This is a good long-term story.
If you look at the macro picture in natural gas, a lot of it is happening in Texas, and that's where we have a great position. A lot of the growth in production, increasingly the view is coming from the Permian, and a lot of the growth in demand outlets are coming along the Texas Gulf Coast, in the form of LNG exports, Mexico exports, petchem growth, et cetera. A very good picture for us on our overall network here. All right. On our liquids business, this makes up on our segment earnings before DD&A. When you put our products and liquids pipelines together with our terminals business, this makes up another 30%. You've got gas at 56%. This is another 30%. Same commercial model. We contract for the capacity, fee-based, independent of the commodity price, significant take-or-pay component, et cetera.
Here, we're seeing a growth in crude and NGLs. We're seeing growth in refined products, at least particularly on the export side. Domestic refined product demand is growing 1%-1.5% a year. Fairly steady growth here, and the box at the lower right is showing you. We have, in the Houston Ship Channel, a significant network of terminals assets with 12 barge docks, 11 ship docks, cross-channel pipelines that interconnect our facilities, inbound pipelines that are coming from the refineries with the refined products, outbound pipelines that are taking that product into Chicago, taking the product up to the Northeast on Colonial Pipeline. Rail connections, a significant truck rack operation, et cetera. This is a very well-networked position, and we've seen our refined products exports over the dock grow to over 300,000 barrels a day off of our facilities here.
Over time, in our terminals business in particular, we have focused on our hub or network positions. We've sold off some of the bulk assets, and used that to pay down debt. We've focused increasingly on those positions that give our customers options, give us options and flexibility, and allow us to build a bit of a moat around our business because of that connectivity and flexibility. All right. Beyond the backlog, we think there's additional takeaway capacity expansions. We have an additional southbound expansion using existing pipe on the TGP system that we can do for Marcellus and Utica. As the market, particularly in California, but as the market goes increasingly to renewable sources of supply for electricity, there's going to need to be a backstop, and the cheapest form of backstop is a natural gas storage field and a natural gas generation facility.
We believe and have talked to our customers in California about the fact that their need for our deliverability into the state is actually growing as they add more intermittent resources to the generation base. We've talked about Permian plenty. Additional supply for LNG exports. Haynesville. We've seen a lot of growth in the Haynesville over the last year. We have a system that we still have to do well connects or pad connects off of, but the existing backbone of that system was sized for bigger volume than we're experiencing today, so we can add incremental volumes to that system without significant additional capital spend. Just overall, estimated over $400 billion of additional North American infrastructure growth needed over the next 20 years. A very good opportunity. Okay.
This is your business, not mine, but we can't help but point out that if you compare us to our peers, we are trading at a discount. We think with all the work that we've done, with moving early to fix our balance sheet, to self-fund our projects, to tap into additional growth projects, to resolve the situation in Canada, et cetera, we think we're trading at a discount that we don't agree with. If you look at those top two across the top boxes, that represents about a 30% upside if we just came back in line. That's my public service announcement to you all. All right. The main takeaways. A diversified energy infrastructure, North America diversified energy infrastructure, think well-positioned for growth. Great financial flexibility given where we've gotten to on our balance sheet. We're returning value to shareholders. Diversified business, positioned for growth, et cetera.
I think we've got a great business, and we manage it in a very disciplined way for you all, and we work hard for you every day, and we're going to keep doing the economically rational thing every day with the capital. All right. With that, Ross, do you want to take questions?
Probably just time for one or two here. Let me just ask one really quick. You've got your balance sheet in fine shape right now, heading towards BBB by the agencies. You're raising your distribution over time and purchasing shares as well as part of the program. Where would you like your ultimate coverage to look like, your dividend coverage ratio to get to over time?
Our view is that we want to maintain a well-covered dividend. We don't want to be in a position of being dependent upon capital markets to make economically rational decisions to invest in growth projects when those opportunities are available to us. We haven't set specific targets yet. As we're looking, we've been clear on our dividend growth out to 2020. As we get closer to there, we're going to be looking for whether we grow that dividend at the underlying base business or whether we grow it at something a little better because we have the room to. In any case, we'll be well covered.
All right. Any other questions from the audience?
We've got a breakout session in the Mercury Room, I believe. Okay. Thank you all.
All right. Thank you. Thanks, Steve.