Energy Transfer Q3 EBITDA Rises 31%, 2026 Outlook Raised

Energy Transfer LP (ET) reported a 31% increase in third-quarter 2026 adjusted EBITDA and raised its full-year outlook, supported by higher transportation, gathering and natural gas liquids volumes. The partnership also advanced a broad expansion program tied to Permian Basin production, power generation and data-center demand.

Adjusted EBITDA reached $5.03 billion for the quarter, while distributable cash flow attributable to Energy Transfer partners rose 33% from a year earlier to $2.52 billion. GAAP net income was $1.81 billion. For the first nine months of 2026, adjusted EBITDA totaled $15.03 billion and net income was $6.32 billion.

Energy Transfer now expects 2026 adjusted EBITDA of $19.7 billion to $19.9 billion, with the midpoint $850 million above its previous forecast. The partnership projected 2026 growth capital spending of approximately $5.4 billion to $5.6 billion. Through the first nine months, growth capital expenditures excluding Sunoco and USA Compression were $3.9 billion, while maintenance spending on the same basis was $766 million.

The company announced its 20th consecutive quarterly distribution increase, setting the payout at $0.3425 per unit, more than 3% above the third-quarter 2025 level.

Higher volumes and new capacity

Operating volumes increased across several major businesses. Compared with the prior-year quarter, intrastate natural gas transportation volumes rose 14%, midstream gathered volumes increased 6%, NGL export volumes gained 9%, NGL transportation volumes climbed 6% and NGL fractionation volumes were up 5%.

Phase I of the Hugh Brinson Pipeline entered full service on September 1, ahead of schedule. The roughly 400-mile system currently has capacity of about 1.5 billion cubic feet per day, connecting the Waha and Midland Basin areas with Energy Transfer’s network south of Dallas-Fort Worth. Phase II, which will add downstream compression and increase capacity to more than 2.3 Bcf/d, is expected to begin service in the first quarter of 2027. Energy Transfer said the approximately $2.7 billion project is now expected to finish under budget.

In October, the partnership placed the 275 MMcf/d Mustang Draw II processing plant into service in the Midland Basin. It also completed compression and metering additions on the Rover Pipeline during the third quarter to support a 250,000 MMBtu/d, 15-year transportation agreement with a Marcellus producer.

Energy Transfer said about 90% of its earnings mix is fee-based. Commodity exposure accounts for an estimated 5% to 10%, while spread margins generally represent 0% to 5%. The partnership expects spread margins to slightly exceed 5% in 2026 following business outperformance associated with first-half commodity-price volatility.

Natural gas demand and Permian expansion

Since the beginning of 2025, Energy Transfer has executed more than 9.5 million MMBtu/d of natural gas agreements with demand-pull customers, including data centers, hyperscalers and power plants. Recent commitments include a 250,000 MMBtu/d agreement associated with Crusoe’s Abilene facilities, approximately 150,000 MMBtu/d of firm service for two Missouri power plants and connections serving five Oklahoma power plants with combined demand of about 400,000 MMBtu/d.

The partnership also outlined a proposed South Mississippi Pipeline with expected capacity of about 1.2 Bcf/d and total capital spending of $1.6 billion. Energy Transfer would likely own 51% and operate the project, which is targeted for service in 2030. A binding open season is underway, and final capacity and pipeline dimensions will depend on additional customer commitments.

In October, Energy Transfer agreed to acquire Vaquero Midstream for approximately $2.63 billion in cash and ET common units. Vaquero’s Delaware Basin assets include about 300 miles of gas gathering pipelines and the Caymus Processing Complex, which has approximately 675 MMcf/d of capacity. The site can accommodate two additional processing trains, potentially increasing capacity to about 1.2 Bcf/d.

Management expects the acquisition to be immediately accretive to distributable cash flow per common unit. The transaction represents approximately 8.5 times estimated 2027 adjusted EBITDA, with the multiple expected to fall below seven times as existing processing capacity is more fully utilized. Vaquero’s assets are supported by roughly 100,000 dedicated acres and contracts with an average remaining life of about 10 years.

NGL infrastructure investment

Energy Transfer increased the planned ethane export capacity of its Nederland expansion to approximately 300,000 barrels per day from 240,000 barrels per day. The project also includes 55,000 barrels per day of additional LPG export capacity, a new 30-inch pipeline, system optimization between Mont Belvieu and Nederland, and two additional ship docks.

The approximately $1.5 billion expansion is expected to enter service in stages beginning in 2028, with the docks scheduled for completion in mid-2029. All planned ethane export capacity is committed under long-term agreements extending into the 2040s. Once current projects are complete, total NGL export capacity at Nederland is expected to reach about 1.3 million barrels per day.

The partnership also plans to build Frac X, a 200,000-barrel-per-day fractionator at Mont Belvieu scheduled for the first half of 2029. Together with the 165,000-barrel-per-day Frac IX expected to start service late in 2026, the project would increase total Mont Belvieu fractionation capacity to approximately 1.6 million barrels per day.

Energy Transfer’s outlook remains subject to project execution, regulatory approvals, customer commitments and the successful integration of acquisitions. The partnership also cautioned that projected benefits may not be fully realized and that commodity-price movements, financing requirements and other factors outside its control could cause actual results to differ from current expectations.