Energy Transfer’s latest earnings call highlighted record-breaking production in the Permian Basin, strategic midstream and pipeline investments, and surging global demand for LNG, LPG, and NGL exports. Additionally, the company reinforced its commitment to fee-based revenue streams, ensuring long-term financial stability and margin protection. Here’s a breakdown of how Energy Transfer is positioning itself for sustained growth and profitability in the evolving energy market.

Permian Basin: Unprecedented Growth Driving Midstream Expansion

The Permian Basin continues to be the dominant driver of U.S. oil and gas production, with Energy Transfer reporting a 9% increase in legacy Permian throughput in 2024. This remarkable growth has fueled strong demand for midstream infrastructure, requiring new processing plants, gathering systems, and pipeline expansions.

“We’ve seen 10 Bcf of growth over the last four or five years out of the Permian. We think we’ll go up another six to seven over the next four or five years.” – Marshal S. McCrea, Co-CEO

To meet this rising demand, Energy Transfer is investing $1.6 billion in midstream projects, primarily focused on the Permian Basin. This investment includes:

New processing plants such as the Badger Plant (200 MMcf/d capacity, Delaware Basin, online mid-2025) and the Mustang Draw Plant (275 MMcf/d, Midland Basin, online H1 2026).
Enhancements to existing plants, adding 100 MMcf/d in incremental processing capacity by Q1 2025.
Expansion of crude oil gathering systems and joint ventures to support increased production.

“There’s just an insatiable need for more cryogenic processing plants in the Permian Basin, and we are so well-positioned to benefit from that across our entire enterprise.” – Marshal S. McCrea, Co-CEO

Major Pipeline Investments to Unlock Permian Gas Supply

With rising Permian production comes the need for expanded pipeline capacity to move natural gas, crude oil, and NGLs to market. The centerpiece of Energy Transfer’s pipeline investment strategy is the Hugh Brinson Pipeline, a 42-inch, 400-mile natural gas pipeline that will transport up to 2.2 Bcf/d from Waha, TX, to Maypearl, TX.

Phase 1 (1.5 Bcf/d capacity) expected online by late 2026.
Phase 2 (expansion to 2.2 Bcf/d) under consideration.
$2.7 billion total investment, backed by long-term, fee-based contracts.

“The Hugh Brinson pipeline will further establish Energy Transfer as the premier option to support power plant and data center growth in the state of Texas.” – Thomas E. Long, Co-CEO

Additionally, Energy Transfer is investing in NGL and refined product pipelines to enhance market connectivity, including:

Sabina 2 Pipeline Expansion – Increasing Mont Belvieu to Nederland capacity from 40,000 to 70,000 Bbls/d by mid-2026.
Crude gathering system expansions in the Permian and Williston Basins.

“By focusing on brownfield expansions and system optimization, we can achieve capital efficiency while meeting growing energy demand.” – Marshal S. McCrea, Co-CEO

Export Growth: Meeting Surging Global Demand for LNG, LPG, and NGLs

Global demand for U.S. LNG, LPG, and NGLs is skyrocketing, with Energy Transfer setting record export volumes in 2024 from its Nederland and Marcus Hook terminals.

“We moved record volumes across our interstate, midstream, NGL, and crude segments for the year ended 2024. In addition, we exported a record amount of total NGLs out of our Nederland and Marcus Hook terminals.” – Thomas E. Long, Co-CEO

To accommodate this demand boom, the company is investing heavily in export infrastructure, including:

1. Nederland Terminal Expansion

Flexport Expansion Project – Increasing ethane & propane export capacity, ethane & propane service begins mid-2025, and ethylene service in Q4 2025.
Supports surging international demand for petrochemical feedstocks and heating fuels.

“At our Nederland Terminal, we continue to make progress on the construction of our Flexport expansion project… The project will expand our NGL export capacity and remains on schedule for an anticipated in-service for ethane and propane in mid-2025.” – Thomas E. Long, Co-CEO

2. Marcus Hook Terminal Expansion

Adding a 900,000-barrel refrigerated ethane storage tank.
Boosting ethane chilling capacity to improve loading speeds.
Increasing LPG export capacity to serve European and Asian markets.

“At our Marcus Hook terminal, we continue to see strong demand for our NGL exports… Construction continues on a 900,000-barrel refrigerated ethane storage tank and additional ethane chilling capacity.” – Marshal S. McCrea, Co-CEO

3. Lake Charles LNG – Securing Long-Term Export Contracts

20-year LNG sale agreement signed with Chevron (2 million tons per annum).
Negotiating additional LNG contracts totaling over 20 million tons.
Final Investment Decision (FID) expected by Q4 2025.

“We continue to make progress toward full commercialization of this project, which we believe and many of our customers believe is the most compelling LNG project on the Gulf Coast.” – Thomas E. Long, Co-CEO

Commitment to Fee-Based Revenue: Long-Term Stability & Margin Protection

Energy Transfer reinforced its commitment to fee-based revenue, ensuring stable cash flows and predictable margins.

More than 90% of Adjusted EBITDA is fee-based.
Long-term contracts minimize exposure to commodity price volatility.
Expansion projects backed by take-or-pay agreements.

“We remain focused on fee-based growth opportunities that provide long-term cash flow visibility for our business.” – Marshal S. McCrea, Co-CEO

“With more than 90% of our cash flow coming from fee-based contracts, we are well insulated from commodity price swings, which helps protect our margins.” – Marshal S. McCrea, Co-CEO

Conclusion: Energy Transfer Positioned for Sustainable Growth

Energy Transfer’s strategic investments in the Permian Basin, pipeline expansions, and export infrastructure demonstrate its commitment to capturing growing global energy demand. With a fee-based business model, disciplined capital deployment, and record-high export volumes, the company is well-positioned to generate strong cash flows and shareholder returns well into the future.