Energy Transfer (NYSE:ET) reported record full-year 2025 adjusted EBITDA and outlined an expanded slate of natural gas and NGL-focused capital projects during its fourth-quarter 2025 earnings call, while management emphasized capital discipline and a continued target of 3% to 5% annual distribution growth.
2025 results: record EBITDA, steady quarterly cash flow
For full-year 2025, Energy Transfer posted adjusted EBITDA of nearly $16.0 billion, up from $15.5 billion in 2024 and described by management as a partnership record. Distributable cash flow (DCF) attributable to partners, as adjusted, was $8.2 billion versus $8.4 billion the prior year.
In the fourth quarter, adjusted EBITDA was approximately $4.2 billion compared to about $3.9 billion in the year-ago period. DCF attributable to partners was approximately $2.0 billion, consistent with fourth-quarter 2024. Management also cited quarterly records in NGL fractionation throughput, LPG exports, Nederland terminal volumes, and crude transportation throughput.
Segment performance and notable one-time items
In NGL and refined products, adjusted EBITDA was $1.1 billion, in line with the prior-year quarter. Management pointed to higher throughput across Gulf Coast and Mariner East operations, Mont Belvieu fractionators, and Nederland terminal volumes. Results included a one-time $56 million benefit from a regulatory order impacting prior and current period rates, offset by $58 million of lower gains tied to the timing of inventory hedge settlements that the company expects to recognize in the first quarter of 2026. Fog-related loading delays at Nederland created a $14 million impact that management also said it is on track to make up in the first quarter of 2026.
Midstream adjusted EBITDA was $720 million versus $705 million a year earlier, driven by volume growth in the Permian, Northeast, and Ark-La-Tex. The segment was partially offset by a one-time $14 million expense increase in intersegment NGL transportation fees tied to the same regulatory order.
Crude oil segment adjusted EBITDA declined to $722 million from $760 million in the fourth quarter of 2024. Management said volumes grew across several crude pipeline systems and the Permian gathering system, and results included a one-time $19 million increase related to the regulatory order. Those factors were offset by lower transportation revenues, primarily on the Bakken Pipeline.
Interstate natural gas adjusted EBITDA increased to $523 million from $493 million, attributed to more capacity sold and higher utilization on Panhandle Eastern, Trunkline, Florida Gas, and Transwestern. Intrastate natural gas adjusted EBITDA rose to $355 million from $263 million on increased pipeline and storage optimization and higher volumes on the Texas intrastate system due to third-party volume growth.
On the regulatory matter, management said the one-time impacts reflect a FERC order allowing pipelines to recover revenues after FERC “took what was ultimately determined to be an unlawful action” in 2022 when it changed index methodology. Management also walked through other fourth-quarter items, including producer shut-ins in the Permian tied to low and negative Waha pricing and $60 million of transaction expenses. The company said that after normalizing for these items, the quarter reflected a net negative impact of about $90 million, and that more than $70 million is expected to be recouped in the first quarter.
2026 guidance raised on USA Compression acquisition impact
Energy Transfer increased its 2026 adjusted EBITDA guidance to a range of $17.45 billion to $17.85 billion from its prior range of $17.3 billion to $17.7 billion. Management said the change is “solely attributable” to USA Compression’s acquisition of J-W Power Company, which closed on Jan. 12, 2026.
Capital spending outlook: $5–$5.5 billion in 2026 growth capex
The partnership said 2026 organic growth capital is expected to total $5.0 billion to $5.5 billion, excluding Sun and USA Compression, up from approximately $4.5 billion spent on organic growth capital in 2025. Management said roughly two-thirds of 2026 growth capital is targeted toward natural gas-related projects, including the Hugoton and Desert Southwest Pipeline projects, Mustang Draw 1 and 2 processing plants, and continued Permian system build-out.
About a quarter of the 2026 growth capital is expected to go toward NGL and refined products projects, including expansions at Nederland and Marcus Hook, as well as Frac IX and Mont Belvieu. Management said these expansions are contracted under long-term commitments and are expected to generate “mid-teen returns” and “considerable earnings growth over the next decade or more.”
Major project updates: Desert Southwest, Hugh Brinson, Florida Gas, data centers, and DAPL
- Desert Southwest Pipeline Project: In December, Energy Transfer upsized the mainline diameter from 42 inches to 48 inches to meet anticipated demand, increasing expected capacity to up to 2.3 Bcf/d. Management said a full build-out is expected to cost approximately $5.6 billion, with in-service still expected by the fourth quarter of 2029. The company said it has engaged with more than 275 stakeholders along the route to date.
- Hugh Brinson Pipeline: Management said construction is progressing, with 100% of 42-inch pipe delivered and mainline construction about 75% complete. Phase I is expected in service in the fourth quarter of 2026, with the possibility of flowing some early volumes before then if the schedule holds. Phase II remains expected in service in the first quarter of 2027. The bidirectional system is designed to move roughly 2.2 Bcf/d west-to-east and about 1.0 Bcf/d east-to-west. Management said the west-to-east capacity is fully contracted and that backhaul commitments are growing, which could add “significant upside with no additional capital.”
- Florida Gas Transmission expansions: The company said open seasons were recently completed for two projects supported by long-term binding agreements. Phase IX includes up to 82 miles of looping plus compression upgrades, expanding capacity by up to 550 MMcf/d with expected in-service in the fourth quarter of 2028. A South Florida reliability and delivery project includes a 37-mile lateral with compression and a new meter station, expected in service in the first quarter of 2030. Energy Transfer’s share of costs was cited as up to $535 million for Phase IX and $110 million for the South Florida project, depending on final shipper volume elections.
- Storage expansion: A new storage cavern at the Bethel Natural Gas Storage Facility is expected to double working gas capacity to more than 12 Bcf, with in-service targeted for late 2028.
- Data centers and power demand: Management reiterated long-term agreements with Oracle to deliver about 900,000 Mcf/d to three U.S. data centers, noting that gas has begun flowing on the first lateral to a campus near Abilene, Texas, with two more laterals expected to be completed in mid-2026. The company also referenced a 20-year binding agreement with Entergy Louisiana for at least 250,000 MMBtu/d of firm transportation to facilities in Richland Parish, Louisiana. Management said that within the last year it has contracted more than 6 Bcf/d of pipeline capacity with “demand-pull customers,” including end users, data centers, and utilities.
- Oklahoma power connections: The company said its Oklahoma intrastate team added connections to serve three new power plant loads totaling about 190 MMcf/d, expected online in the second quarter of 2026, supported by long-term contracts with investment-grade counterparties. Management said it is also in advanced negotiations to serve another 350 MMcf/d of new power demand in Oklahoma, alongside additional opportunities across 13 other states.
- Permian processing and NGL exports: Mustang Draw 1 and 2 are expected in service in the second and fourth quarters of 2026, respectively. At Nederland, volumes on the Flex Export NGL expansion have continued to ramp, and the company exported its first two ethylene cargoes in December 2025.
- Dakota Access Pipeline (DAPL) and Enbridge project: Energy Transfer said it continues to work with Enbridge on a project to provide capacity for approximately 250,000 barrels per day of light Canadian crude through DAPL, with a final investment decision expected by mid-2026. Management also said it completed an open season on DAPL, added incremental volume, and extended some base customers beyond the mid-2030s, at what it described as market-reflective rates.
Management also addressed Lake Charles LNG, stating that development has been suspended as Energy Transfer focuses on projects it believes offer a more attractive risk-return profile. The company said it remains open to discussions with third parties interested in developing the project and is exploring other ways to utilize the terminal more profitably.
Looking ahead, Energy Transfer said it expects growth in 2026 to be driven by the ramp of the Flex Export NGL project, new Permian processing plants, and other projects, while maintaining a leverage target of 4.0x to 4.5x EBITDA and focusing on execution “safely, on time, and on budget.”
About Energy Transfer (NYSE:ET)
Energy Transfer (NYSE: ET) is a Dallas-based midstream energy company that develops and operates infrastructure for the transportation, storage and processing of hydrocarbons. The company’s operations focus on moving and storing natural gas, natural gas liquids (NGLs), crude oil and refined products through an integrated network of pipelines, terminals, storage facilities and processing plants. Energy Transfer provides core midstream services such as gathering, compression, fractionation, processing, and bulk transportation to support production and downstream supply chains.
Its asset base spans an extensive network across the United States, connecting producing regions, processing centers, petrochemical hubs and coastal and inland markets.
