Energy Transfer (ET) Q4 FY25 earnings call: guidance and Q&A

What are the key drivers behind the commercialization momentum in natural gas assets, and where are the next opportunities for growth and integration?

Management highlighted the strategic importance of projects like DSW, Hugh Brinson, and FGT expansions, noting the significant demand for natural gas in areas like Phoenix. They emphasized the ongoing expansion of NGL infrastructure from Permian processing to export terminals. They also noted the broad demand from power plants and manufacturing facilities, not just data centers, across their extensive footprint.

“We are incredibly excited about our footprint and couldn't be more elated of where we're going to be over the next 10 or 15 years because of our asset footprint throughout the United States.”

asked by Theresa Chen · answered by Marshall McCrea

With competitors bringing online downstream Permian NGL assets, how much third-party Permian Y-grade volume does ET transport and frac, and what is the mix with own-produced volumes?

The majority of ET's NGL volumes, approximately 60%, come from its own facilities, with 40% from third parties. This affiliate volume is expected to continue growing as new cryos ramp up, feeding into their transportation, fractionation, and export businesses.

“We're about 60% of our own volumes, 40% third-party, and that affiliate volume number continues to grow. So we'll keep trending -- that 60% will trend up higher as we move through the year.”

asked by Theresa Chen · answered by Dylan Bramhall

What is the status of potentially converting a pipeline from NGL to natural gas service, as discussed last quarter?

The company continuously evaluates asset utilization. While pipeline conversions have occurred in the past (e.g., gas to crude, liquid to diesel), the current growth in NGLs, both from own production and third-party volumes, means they cannot afford to take NGL capacity out of service. Any new natural gas pipeline capacity would likely be a new build.

“We can't afford to take that business. We're going to fill up that NGL pipeline. And if we need to loop another pipeline west to Eastern Texas, that will be a new project for natural gas.”

asked by Gabriel Moreen · answered by Marshall McCrea

Regarding potential early volumes on Hugh Brinson, will these go to third-party customers or ET, and how early could they come online?

The E&C team is ahead of schedule on Hugh Brinson, making early volumes before Q4 2026 confident, though the exact timing and quantity are still being determined. The goal is to provide new egress from the Permian Basin to benefit producers facing negative Waha pricing. More details will be available on the next earnings call.

“At this point, we are confident that we will be able to bring on some volumes earlier than the fourth quarter and how we'll manage that and how we'll operate as how we contractually and regulatory are allowed to do so.”

asked by Jean Ann Salisbury · answered by Marshall McCrea

Can you discuss the pro forma economics of the upsized Desert Southwest project and the potential tariffs for the Enbridge DAPL project?

The Desert Southwest project, given its distance, diameter, and throughput, is expected to be one of the best rate-of-return projects built by the company, especially serving the fast-growing Phoenix area. For DAPL, recent open season results showed good market rates, and the Enbridge project's rates are expected to be in line with those seen from Bakken producers, reflecting the asset's value.

“we think that will be probably 1 of the better rate of return projects that we've ever built just as far as a one-way flow.”

asked by Julien Dumoulin-Smith · answered by Marshall McCrea

How can Energy Transfer benefit from storage opportunities given data centers' need for 99.99% utilization, complementing the pipeline build-out?

Energy Transfer is uniquely positioned with its large-diameter pipelines and over 230 Bcf of storage capacity to provide the near 100% reliability required by data centers. They are actively working on opportunities to provide firm transportation and storage services.

“And then as we mentioned earlier, we have over 230 Bcf of storage and expanding on that as we speak to be able to provide the pretty much 100% reliability that's required by these data centers.”

asked by Manav Gupta · answered by Marshall McCrea

Given the volatile negative Waha pricing, how much open capacity does ET have to capture spreads?

Energy Transfer currently benefits from approximately 160,000 Mcf per day of capacity that can capture spreads related to Waha pricing. The upcoming Hugh Brinson pipeline is expected to significantly help open up the basin for producers.

“But we still have about 160,000 Mcf a day that we're benefiting from wherever the spread is from a day-to-day basis.”

asked by Michael Blum · answered by Marshall McCrea

Can you provide more detail on the regulatory order impacting prior and current period rates, and its future earnings impact?

The regulatory order allowed pipelines to recover lost revenues from an unlawful FERC action in 2022 regarding index methodology. In Q4 2025, this resulted in a $56 million positive impact for NGL and $19 million for Crude, offset by a $14 million negative for Midstream. Additionally, $58 million in hedge timing and $14 million in fog delays are expected to be recouped in Q1 2026, leading to a net negative of about $90 million for Q4 2025 that should reverse.

“On the NGL segment, we had $56 million from this regulatory order that was a onetime positive. Get a little carryover effect from where that sets the rates now, but that's primarily onetime there.”

asked by Jason Gabelman · answered by Adam Arthur