Energy Transfer LP (NYSE: ET) reported second-quarter 2025 net income of $1.16 billion, down from $1.31 billion a year earlier, even as it posted a 3% year-over-year increase in adjusted EBITDA to $3.87 billion. The company continues to advance its aggressive infrastructure growth strategy, announcing a $5.3 billion expansion of its Transwestern Pipeline and new LNG supply deals tied to its proposed Lake Charles LNG export terminal.
Operational and Financial Overview
Despite the slight decline in earnings, Energy Transfer saw continued volume growth across nearly all asset classes. The partnership set new records in midstream gathered volumes, NGL transportation, terminal and export volumes, and crude oil transportation. Interstate gas transportation volumes rose 11% year-over-year, while midstream volumes jumped 10%.
Adjusted distributable cash flow attributable to partners came in at $1.96 billion, slightly below the $2.04 billion recorded in Q2 2024. The company’s quarterly cash distribution rose over 3% year-over-year to $0.33 per unit ($1.32 annualized).
Growth capital expenditures totaled $1.04 billion in the quarter, with full-year capex guidance reaffirmed at approximately $5 billion.
Strategic Expansions and Project Milestones
Energy Transfer unveiled a major new build: the 1.5 Bcf/d Desert Southwest expansion of its Transwestern Pipeline. The $5.3 billion project will involve a 516-mile, 42-inch line connecting the Permian Basin to Arizona, New Mexico, and Texas markets, with startup expected by Q4 2029.
The company also greenlit:
-
Phase II of the Hugh Brinson Pipeline, boosting bidirectional capacity to 2.2 Bcf/d (west-to-east) and 1 Bcf/d (east-to-west).
-
A new natural gas storage cavern at its Bethel facility, doubling storage to 12 Bcf.
-
An expansion of the SESH pipeline to meet rising power generation demand.
Several processing and export projects entered service during Q2:
-
The 200 MMcf/d Lenorah II gas processing plant in the Midland Basin.
-
A new NGL export expansion at the Nederland terminal, which adds up to 250,000 Bbls/d of export capacity.
-
The relocated 200 MMcf/d Badger plant in the Delaware Basin.
-
The second of eight planned 10-MW gas-fired generators in West Texas.
LNG Developments Gain Steam
Energy Transfer also advanced its LNG ambitions with a series of long-term agreements:
-
In June, Chevron increased its offtake from the proposed Lake Charles LNG terminal to 3.0 mtpa through a new 20-year SPA.
-
In May, Kyushu Electric signed a 1.0 mtpa, 20-year deal.
-
In April, MidOcean Energy agreed to fund 30% of the Lake Charles terminal construction in exchange for 30% of LNG production, formalized via a Heads of Agreement.
These agreements add momentum to Lake Charles LNG, which has seen delays in the past amid shifting U.S. LNG permitting policies and market competition.
Diversified Cash Flows and Resilient Outlook
Energy Transfer emphasized the strength of its diversified portfolio. No single segment accounted for more than one-third of Q2 adjusted EBITDA, and 40% of that total came from natural gas assets. The majority of revenues remain fee-based, reducing commodity exposure.
The company now expects to finish 2025 at or slightly below the low end of its adjusted EBITDA guidance of $16.1–$16.5 billion.
As of June 30, Energy Transfer had $2.51 billion in available borrowing capacity on its $5 billion credit facility. The partnership also redeemed $500 million of preferred equity in May using cash and commercial paper.