A kinetic equation for a dilute gas of hard spheres confined between two parallel plates separated a distance smaller than two particle diameters is derived. It is a Boltzmann-like equation, which incorporates the effect of the confinement on the particle collisions. A function S(t) is constructed by adding to the Boltzmann expression a confinement contribution. Then it is shown that for the solutions of the kinetic equation, S(t) increases monotonically in time, until the system reaches a stationary inhomogeneous state, when S becomes the equilibrium entropy of the confined system as derived from equilibrium statistical mechanics. From the entropy, other equilibrium properties are obtained, and molecular dynamics simulations are used to verify some of the theoretical predictions.