Energy Transfer LP Common Units (ET) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed outlook: a slight reduction in 2025 EBITDA guidance, yet promising long-term project growth. The Q&A highlights management's confidence in project returns and resilience during market volatility. However, uncertainties around project timelines and specific financial metrics temper enthusiasm. The neutral sentiment reflects these balanced factors.
Key Financial Performance
Adjusted EBITDA (Full Year 2025) Nearly $16 billion, up 3% year-over-year from $15.5 billion in 2024. This increase was a partnership record.
Distributable Cash Flow (DCF) (Full Year 2025) $8.2 billion, down from $8.4 billion in 2024. No specific reasons for the decrease were mentioned.
Adjusted EBITDA (Q4 2025) Approximately $4.2 billion, up from $3.9 billion in Q4 2024. This increase was attributed to record volumes across various segments.
Distributable Cash Flow (DCF) (Q4 2025) Approximately $2 billion, consistent with Q4 2024. No specific reasons for the consistency were mentioned.
NGL and Refined Products Adjusted EBITDA (Q4 2025) $1.1 billion, consistent with Q4 2024. Higher throughput was offset by lower gains from inventory hedges and loading delays due to fog.
Midstream Adjusted EBITDA (Q4 2025) $720 million, up from $705 million in Q4 2024. This increase was due to volume growth in the Permian, Northeast, and ArkLaTex regions, partially offset by a one-time expense increase of $14 million.
Crude Oil Adjusted EBITDA (Q4 2025) $722 million, down from $760 million in Q4 2024. Growth in crude pipeline systems was offset by lower transportation revenues on the Bakken pipeline.
Interstate Natural Gas Adjusted EBITDA (Q4 2025) $523 million, up from $493 million in Q4 2024. This increase was due to more capacity sold and higher utilization on several pipelines.
Intrastate Natural Gas Adjusted EBITDA (Q4 2025) $355 million, up from $263 million in Q4 2024. This increase was due to increased pipeline and storage optimization and higher volumes across the Texas intrastate pipeline system.
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Operating Highlights
Flexport NGL export project: Volumes on the Flexport NGL export expansion project have ramped up, contributing to record exports out of Nederland for Q4 2025. The first two ethylene cargoes were exported in December 2025.
Mustang Draw I and II plants: Expected to be in service in Q2 and Q4 of 2026, respectively.
Hugh Brinson pipeline: Phase 1 expected to be in service in Q4 2026, with potential for early volumes. Phase 2 expected in Q1 2027. The pipeline is fully contracted from West to East and has growing backhaul commitments.
10-megawatt natural gas-fired electric generation facility: Third facility expected to be in service in Q1 2026, with five additional facilities ready later in 2026.
Desert Southwest Pipeline Project: Upsized from 42 inches to 48 inches to meet demand, increasing capacity to 2.3 Bcf/day. Full buildout expected to cost $5.6 billion and be in service by Q4 2029.
Florida Gas Transmission (FGT) Phase IX and South Florida Project: Phase IX to expand capacity by 550 million cubic feet/day, expected in Q4 2028. South Florida Project to enhance reliability and increase deliveries, expected in Q1 2030. Combined cost up to $645 million.
Bethel natural gas storage facility: Expansion to double storage capacity to over 12 Bcf, expected in late 2028.
Adjusted EBITDA: Full-year 2025 adjusted EBITDA was nearly $16 billion, a 3% increase from 2024 and a partnership record. Q4 2025 adjusted EBITDA was $4.2 billion, up from $3.9 billion in Q4 2024.
DCF (Distributable Cash Flow): Full-year 2025 DCF was $8.2 billion, slightly down from $8.4 billion in 2024. Q4 2025 DCF was $2 billion, consistent with Q4 2024.
Operational records: Record volumes moved across interstate midstream NGL and crude segments, and record NGL exports from Nederland and Marcus Hook terminals in 2025.
Lake Charles LNG project: Development suspended to focus on projects with better risk/return profiles. Open to third-party discussions for potential development.
Capital discipline: Focus on high-return projects while maintaining a leverage target of 4x to 4.5x EBITDA. Targeting long-term annual distribution growth rate of 3% to 5%.
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Risk or Challenges
Regulatory Orders: The company faced a $56 million increase from a regulatory order impacting prior and current period rates, and a $14 million expense increase in intersegment NGL transportation fees due to the same order.
Operational Delays: Loading delays related to fog at Nederland resulted in a $14 million impact, though the company expects to recover this in the first quarter of 2026.
Lake Charles LNG Project Suspension: The company suspended the development of the Lake Charles LNG project, citing a focus on capital discipline and a preference for projects with a more attractive risk/return profile.
Bakken Pipeline Revenue Decline: Lower transportation revenues were reported, primarily on the Bakken pipeline.
Project Execution Risks: The company emphasized the importance of completing projects safely, on time, and on budget, indicating potential risks in project execution given the large slate of growth projects.
Capital Discipline: The company is focused on capital discipline, which may limit its ability to pursue certain growth opportunities.
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Guidance & Outlook
2026 Organic Growth Capital Guidance: Projected to be between $5 billion and $5.5 billion, excluding SUN and USA Compression. Approximately 2/3 of this capital will enhance natural gas assets, including projects like Hugh Brinson and Desert Southwest pipeline projects, Mustang Draw I and II, and Permian Basin system build-out. About 1/4 will focus on NGL and refined products segment expansions, such as Nederland and Marcus Hook terminal expansions, Frac IX, and Mont Belvieu.
Desert Southwest Pipeline Project: Mainline pipeline diameter increased from 42 inches to 48 inches to meet customer demand. Capacity increased to up to 2.3 Bcf per day. Full buildout expected to cost approximately $5.6 billion and be in service by Q4 2029.
Hugh Brinson Pipeline: Phase 1 expected to be in service by Q4 2026, with potential for early volumes. Phase 2 expected in Q1 2027. Fully contracted from West to East with growing backhaul volume commitments. Bidirectional capacity of 2.2 Bcf per day from West to East and 1 Bcf per day from East to West.
Florida Gas Transmission Projects: Phase IX project to expand capacity by up to 550 million cubic feet per day, expected in service by Q4 2028. South Florida Project to enhance reliability and increase deliveries, expected in service by Q1 2030. Combined cost up to $645 million depending on shipper volume elections.
Bethel Natural Gas Storage Facility: New storage cavern expected to double working gas storage capacity to over 12 Bcf. Scheduled for service in late 2028.
Permian Processing Expansions: Mustang Draw I and II plants expected in service in Q2 and Q4 2026, respectively.
Adjusted EBITDA Guidance for 2026: Expected to range between $17.45 billion and $17.85 billion, revised upward due to USA Compression's acquisition of J-W Power Company.
Distribution Growth Rate: Targeting a long-term annual growth rate of 3% to 5%.
Leverage Target: Maintaining a leverage target of 4x to 4.5x EBITDA during the investment period.
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Shareholder Return Plan
Annual Distribution Growth Rate: Energy Transfer continues to target a long-term annual distribution growth rate of 3% to 5%.
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Key Q&A
Q:What are the key drivers behind the progress in the commercialization of the natural gas asset base, and what are the next opportunities?
A:The key drivers include the DSW project, a 500-mile 48-inch pipeline, and the Florida Gas pipeline system with expansion opportunities. The Hugh Brinson system allows for versatile gas movement and sourcing. Future opportunities include new cryos in the Permian Basin, NGL system expansions, Marcus Hook ethane export capabilities, and power plants for population and manufacturing growth.
Q:How much third-party downstream Permian Y-grade volumes are transported and fractionated?
A:60% of the volumes are from their own facilities, while 40% are third-party. The affiliate volume is expected to grow.
Q:What is the status of converting a pipe from NGL to gas service?
A:The company evaluated the conversion but decided against it due to the growth in NGLs. They plan to fill the NGL pipeline and may consider a new project for natural gas.
Q:How did the assets perform during the winter weather and gas market volatility?
A:The assets performed well, with the team ensuring energy delivery during critical times. Although profits were not as high as during Uri, the company kept customers whole and managed storage effectively.
Q:Will there be early volumes on Hugh Brinson, and how will they be managed?
A:Early volumes are expected before the fourth quarter, but the exact timing and amount are uncertain. The company will manage volumes based on contractual and regulatory allowances.
Q:What is the limit for Canadian heavy crude on the DAPL asset?
A:The company prioritizes Bakken producers but is exploring additional volumes through DAPL as Bakken volumes potentially decline. Currently, the project scope is to move 250,000 barrels per day of light volumes.
Q:How should medium-term growth for Energy Transfer be viewed?
A:The long-term distribution growth rate of 3%-5% annually is strategically set, driven by coverage. This sets a floor for achievable growth.
Q:What is the outlook for recontracting on the Mariner system?
A:The company is confident in maintaining and growing volume throughput, with opportunities for expansion.
Q:What are the pro forma economics for the Desert Southwest project?
A:The project is expected to be one of the better rate-of-return projects, with a 48-inch pipeline transporting gas to Phoenix. The company has secured materials and is ahead of schedule.
Q:What is the status of the Lake Charles terminal?
A:The terminal is not moving forward as an LNG project under Energy Transfer's lead. The company is exploring other uses, such as NGLs, crude oil, or other commodities.
Q:How can Energy Transfer benefit from storage opportunities for data centers?
A:With over 230 Bcf of storage and expanding capacity, the company can provide 100% reliability required by data centers, supported by their large pipeline network.
Q:Can Energy Transfer supply more gas to data centers if demand increases?
A:Yes, the company is well-positioned with its pipeline network and can add capacity through looping and compression.
Q:How much open capacity does Energy Transfer have to capture Waha spreads?
A:The company has about 160,000 Mcf per day of open capacity to benefit from Waha spreads.
Q:Is there a change in rates for fractionation with new capacity entering the market?
A:The NGL transportation and fractionation segment is competitive, but the company focuses on filling and maintaining its assets.
Q:What is the expected annual growth CapEx over the next few years?
A:While specific guidance is not provided, the company expects strong growth with numerous projects in the queue, governed by staying within leverage targets.
Q:What is required to reach FID for the project with Enbridge?
A:The project is in the commercialization phase, with productive discussions ongoing with customers in Canada.
Q:What is the capacity and flow status for the Oracle data center before Hugh Brinson comes online?
A:The exact volume flow is confidential, but the company is well-positioned to meet gas supply needs as the data center builds out.
Q:How much gas will make it to Carthage from Hugh Brinson?
A:The exact amount is uncertain due to multiple pipeline projects and market dynamics, but the company is well-positioned to capitalize on production and market changes.
Q:What do the 13-state power-related projects look like?
A:The projects range from new long-haul pipelines to simple interconnects, with opportunities for electric generation behind data centers.
Q:What was the regulatory order's impact on earnings?
A:The regulatory order allowed pipelines to recover lost revenues, resulting in a one-time positive impact of $56 million for NGL and $19 million for crude, with some carryover effects.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the exact timing and amount of early volumes for Hugh Brinson, the capacity and flow status for the Oracle data center, and the exact amount of gas expected to reach Carthage from Hugh Brinson. Additionally, they did not provide specific guidance on annual growth CapEx or strategies for recontracting on the Mariner system.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CEO Director
CO CEO
Chief Executive
Co Chief
Director LE
Energy Transfer
Executive Officer
GP LLC
Instructions event
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conference Co
ET Transcript
Energy Transfer LP Common Units (ET) Q4 2025 Earnings Call Transcript
Unknown2-17
The earnings call presents a mixed outlook: a slight reduction in 2025 EBITDA guidance, yet promising long-term project growth. The Q&A highlights management's confidence in project returns and resilience during market volatility. However, uncertainties around project timelines and specific financial metrics temper enthusiasm. The neutral sentiment reflects these balanced factors.
Energy Transfer LP Common Units (ET) Q3 2025 Earnings Call Transcript
Positive11-6
The earnings call summary highlights a robust strategic plan with significant organic growth projects, including the Desert Southwest Pipeline and Hugh Brinson Pipeline expansion, indicating potential for long-term revenue growth. The Q&A section reveals strong demand for data center deals and pipeline expansions, with positive analyst sentiment. While guidance is slightly lowered, optimistic future project impacts and strong partnerships suggest a positive outlook. No market cap is provided, but the overall sentiment leans towards a positive stock price movement in the short term.
Energy Transfer LP Common Units (ET) Q2 2025 Earnings Call Transcript
Positive8-7
The earnings call reflects a positive outlook with strong financial metrics and strategic initiatives. The company is making significant progress on key projects like Lake Charles LNG and Hugh Brinson, with optimistic guidance for future cash flows. The Q&A session highlighted management's confidence in project execution and market opportunities, despite some uncertainties in specific project contributions. The focus on customer needs and strong engineering capabilities further supports a positive sentiment. Overall, the strategic plans and financial health position the company well for growth, indicating a likely positive stock price movement.
Energy Transfer LP (NYSE:ET) Q1 2025 Earnings Call Transcript
Positive5-7
The earnings call highlights strong financial performance with increased adjusted EBITDA in key segments like midstream and interstate natural gas. The Q&A section reveals positive sentiment towards future growth, with new contracts and expansion plans in place. However, there are some concerns regarding vague responses on C Corp presence and production outlook. Overall, the strong financial metrics, optimistic guidance, and strategic expansions indicate a positive stock price movement in the next two weeks.
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Frequently Asked Questions
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