Energy Transfer LP

What they do

Energy Transfer moves natural gas through intrastate and interstate transportation and storage systems, and moves crude oil, NGLs and refined products through transportation, terminalling and marketing operations. It also provides NGL storage and fractionation services and LNG regasification, and owns interests in Sunoco LP, USAC and the managing member of SunocoCorp. The intrastate transportation and storage segment alone includes roughly 12,200 miles of intrastate natural gas pipelines with about 24 Bcf/d of capacity and five natural gas storage facilities in Texas and Oklahoma. Cash flows are largely distributed up from subsidiaries including Sunoco LP and USAC to Energy Transfer, which pays quarterly distributions to unitholders.

Revenue drivers

• Intrastate transportation and storage — Charges customers demand fees for reserved pipeline capacity plus transportation fees based on actual volumes moved, with demand fees owed even if no gas flows; the segment operates about 12,200 miles of intrastate pipeline and five storage facilities in Texas and Oklahoma.
• NGL transportation, fractionation and exports — Moves and fractionates NGLs and exports them; NGL transportation volumes rose 13% and NGL exports rose 25% year over year in Q2 2026, both setting Partnership records, and the Nederland export expansion adds 240,000 bpd of ethane and 55,000 bpd of LPG capacity.
• Crude oil transportation and midstream gathering — Transports crude oil and gathers natural gas from producing regions; crude oil transportation volumes were up 4% and midstream gathered volumes were up 4% in Q2 2026, each a Partnership record.
• Subsidiary distributions (Sunoco LP, USAC) — Energy Transfer derives cash flows from distributions related to its investments in Sunoco LP and USAC, with amounts based on those subsidiaries' earnings and available cash; Sunoco and USAC have been the vehicles for recent acquisitions in fuel terminals and compression services.

Recent performance

For the three months ended June 30, 2026, Energy Transfer reported net income attributable to partners of $2.09 billion, up from $1.16 billion a year earlier, with basic net income per common unit of $0.59. Adjusted EBITDA was $5.07 billion, a 31% increase from $3.87 billion in the second quarter of 2025, and distributable cash flow attributable to partners, as adjusted, was $2.59 billion, up 32% from $1.96 billion. Quarterly revenue rose steadily across the last four reported periods, from $19.95 billion in Q3 2025 to $34.33 billion in Q2 2026. Growth capital expenditures were $1.10 billion in the second quarter of 2026 and maintenance capital expenditures were $307 million. Full-year revenue was $85.54 billion in 2025, while net income was $4.43 billion.

Strategy

Management is expanding natural gas infrastructure to serve power generation and LNG export demand, including the Hugh Brinson Pipeline, now in commercial service and expected to reach full Phase I capacity of 1.5 Bcf/d by September 1, 2026, and the Desert Southwest expansion. It is also growing NGL exports, adding capacity at Nederland and upgrading the Lone Star Express pipeline for more than 90,000 Bbl/d of incremental Permian NGL takeaway. The Partnership is investing in processing and power infrastructure, including the 275 MMcf/d Mustang Draw I processing plant placed in service in the Midland Basin and natural-gas fired electric generation facilities in West Texas. It guides to $5.6 billion to $5.9 billion of 2026 growth capital. Sunoco LP and USAC continue to pursue acquisitions, including TanQuid, Delta and the J-W Power acquisition.

Risks

• FERC income tax allowance treatment — FERC's Revised Policy Statement no longer permits master limited partnerships to recover an income tax allowance in cost-of-service rates, which affects regulated interstate natural gas transportation rates.
• Debt and capital spending levels — Long-term debt was $68.39 billion at June 30, 2026, and management expects to invest $5.6 billion to $5.9 billion in growth capital in 2026, with debt or equity issuance possible to fund projects.
• Dependence on permitting and project timing — Large pipeline and export projects such as Desert Southwest depend on FERC processes and construction schedules that can change cost and in-service dates.
• Volume and commodity exposure — Segment results depend on reserved capacity and actual natural gas volumes moved, and crude, NGL and refined products throughput can vary with production and market conditions.

Outlook

Energy Transfer raised its 2026 Adjusted EBITDA guidance to $18.8 billion to $19.1 billion from $18.2 billion to $18.6 billion, and expects to invest $5.6 billion to $5.9 billion in growth capital for the year. Management expects the Hugh Brinson Pipeline to reach full Phase I capacity of 1.5 Bcf/d by September 1, 2026, and expects to announce additional natural gas pipeline projects later in 2026 to serve growing power demand. In July 2026 the Partnership declared its nineteenth consecutive quarterly distribution increase, to $0.3400 per common unit, and raised $1.75 billion of junior subordinated notes due 2057.