Kompany reckons Liverpool are the best team City have played in the Premier League this season, and he is expecting another tough encounter against one of their title rivals.
But the Belgium international defender believes City have more experience in big matches in recent times - and that could give them a crucial edge.
City have won away matches this season against Manchester United, Tottenham and Bayern Munich.
Kompany said: "We remember the match against them earlier in the season and for me, Liverpool are still the best Premier League team we've faced at the Etihad.
"They have been on a fantastic run and we know we have to be focused and leave the pitch at the end knowing we've given everything because there is so much at stake in this game.
"But then again, this is a great challenge for us.
"They have a great squad and while we will be wary of that, I think we have quite a few great players of our own.
"We've been to Old Trafford, White Hart Lane and the Allianz Arena and come away with victories this season and our form on the road is as good as anyone.
"We know that if the players, supporters and staff around our club stand together, we are capable of anything."
Watch Liverpool take on Manchester City at Anfield live on Sky Sports 1 and Sky 3D from 12.30pm this Sunday