Latest news with #CloudBurst
Yahoo
5 days ago
- Business
- Yahoo
Data centers are building their own gas power plants in Texas
NEW BRAUNFELS — Abigail Lindsey worries the days of peace and quiet might be nearing an end at the rural, wooded property where she lives with her son. On the old ranch across the street, developers want to build an expansive complex of supercomputers for artificial intelligence, plus a large, private power plant to run it. The plant would be big enough to power a major city, with 1,200 megawatts of planned generation capacity fueled by West Texas shale gas. It will only supply the new data center, and possibly other large data centers recently proposed down the road. 'It just sucks,' Lindsey said, sitting on her deck in the shade of tall oak trees, outside the city of New Braunfels. 'They've come in and will completely destroy our way of life: dark skies, quiet and peaceful.' The project is one of many others like it proposed in Texas, where a frantic race to boot up energy-hungry data centers has led many developers to plan their own gas-fired power plants rather than wait for connection to the state's public grid. Egged on by supportive government policies, this buildout promises to lock in strong gas demand for a generation to come. The data center and power plant planned across from Lindsey's home is a partnership between an AI startup called CloudBurst and the natural gas pipeline giant Energy Transfer. It was Energy Transfer's first-ever contract to supply gas for a data center, but not likely its last. In a press release, the company said it was 'in discussions with a number of data center developers and expects this to be the first of many agreements.' Previously, conventional wisdom assumed that this new generation of digital infrastructure would be powered by emissions-free energy sources like wind, solar and battery power, which have lately seen explosive growth. So far, that vision isn't panning out as desires to build quickly overcome concerns about sustainability. 'There is such a shortage of data center capacity and power,' said Kent Draper, chief commercial officer at Australian data center developer IREN, which has projects in West Texas. 'Even the large hyperscalers are willing to turn a blind eye to their renewable goals for some period of time in order to get access.' IREN prioritizes renewable energy for its data centers — giant warehouses full of advanced computers and high-powered cooling systems that can be configured to produce crypto currency or generate artificial intelligence. In Texas, that's only possible because the company began work here years ago, early enough to secure a timely connection to the state's grid, Draper said. There were more than 2,000 active generation interconnection requests as of April 30, totalling 411,600 megawatts of capacity, according to grid operator ERCOT. A bill awaiting signature on Gov. Greg Abbott's desk, Senate Bill 6, looks to filter out unserious large-load projects bloating the queue by imposing a $100,000 fee for interconnection studies. Wind and solar farms require vast acreage and generate energy intermittently, so they work best as part of a diversified electrical grid that collectively provides power day and night. But as the AI gold rush gathered momentum, a surge of new project proposals has created yearslong wait times to connect to the grid, prompting many developers to bypass it and build their own power supply. Operating alone, a wind or solar farm can't run a data center. Battery technologies still can't store such large amounts of energy for the length of time required to provide steady, uninterrupted power for 24 hours per day as data centers require. Small nuclear reactors have been touted as a means to meet data center demand, but the first new units remain a decade from commercial deployment, while the AI boom is here today. Now, Draper said, gas companies approach IREN all the time offering to quickly provide additional power generation. Gas provides almost half of all power generation capacity in Texas, far more than any other source. But the amount of gas power in Texas has remained flat for 20 years, while wind and solar have grown sharply, according to records from the U.S. Energy Information Administration. Facing a tidal wave of proposed AI projects, state lawmakers have taken steps to try and slow the expansion of renewable energy and position gas as the predominant supply for a new era of demand. This buildout promises strong demand and high gas prices for a generation to come, a boon to Texas' fossil fuel industry, the largest in the nation. It also means more air pollution and emissions of planet-warming greenhouse gases, even as the world continues to barrel past temperature records. Texas, with 9% of the U.S. population, accounted for about 15% of current gas-powered generation capacity in the country but 26% of planned future generation at the end of 2024, according to data from Global Energy Monitor. Both the current and planned shares are far more than any other state. GEM identified 42 new gas turbine projects under construction, in development or announced in Texas before the start of this year. None of those projects are sited at data centers. However, other projects announced since then, like CloudBurst and Energy Transfer outside New Braunfels, will include dedicated gas power plants on site at data centers. For gas companies, the boom in artificial intelligence has quickly become an unexpected gold mine. U.S. gas production has risen steadily over 20 years since the fracking boom began, but gas prices have tumbled since 2024, dragged down by surging supply and weak demand. 'The sudden emergence of data center demand further brightens the outlook for the renaissance in gas pricing,' said a 2025 oil and gas outlook report by East Daley Analytics, a Colorado-based energy intelligence firm. 'The obvious benefit to producers is increased drilling opportunities.' It forecast up to a 20% increase in U.S. gas production by 2030, driven primarily by a growing gas export sector on the Gulf Coast. Several large export projects will finish construction in coming years with demand for up to 12 billion cubic feet of gas per day, the report said, while new power generation for data centers would account for 7 billion cubic feet per day of additional demand. That means profits for power providers, but also higher costs for consumers. Natural gas, a mixture primarily composed of methane, burns much cleaner than coal but still creates air pollution, including soot, some hazardous chemicals and greenhouse gases. Unburned methane released into the atmosphere has more than 80 times the near-term warming effect of carbon dioxide, leading some studies to conclude that ubiquitous leaks in gas supply infrastructure make it as impactful as coal to the global climate. It's a power source that's heralded for its ability to get online fast, said Ed Hirs, an energy economics lecturer at the University of Houston. But the yearslong wait times for turbines has quickly become the industry's largest constraint in an otherwise positive outlook. 'If you're looking at a five-year lead time, that's not going to help Alexa or Siri today,' Hirs said. The reliance on gas power for data centers is a departure from previous thought, said Larry Fink, founder of global investment firm BlackRock, speaking to a crowd of industry executives at an oil and gas conference in Houston in March. About four years ago, if someone said they were building a data center, they said it must be powered by renewables, he recounted. Two years ago, it was a preference. 'Today?' Fink said. 'They care about power.' Since the start of this year, developers have announced a flurry of gas power deals for data centers. In the small city of Abilene, the builders of Stargate, one of the world's largest data center projects, applied for permits in January to build 360 megawatts of gas power generation, authorized to emit 1.6 million tons of greenhouse gases and 14 tons of hazardous air pollutants per year. Later, the company announced the acquisition of an additional 4,500 megawatts of gas power generation capacity. Also in January, a startup called Sailfish announced ambitious plans for a 2,600-acre, 5,000 megawatt cluster of data centers in the tiny North Texas town of Tolar, population 940. 'Traditional grid interconnections simply can't keep pace with hyperscalers' power demands, especially as AI accelerates energy requirements,' Sailfish founder Ryan Hughes told the website Data Center Dynamics at the time. 'Our on-site natural gas power islands will let customers scale quickly.' CloudBurst and Energy Transfer announced their data center and power plant outside New Braunfels in February, and another company partnership also announced plans for a 250 megawatt gas plant and data center near Odessa in West Texas. In May, a developer called Tract announced a 1,500-acre, 2,000 megawatt data center campus with some on-site generation and some purchased gas power near the small Central Texas town of Lockhart. Not all new data centers need gas plants. A 120 megawatt South Texas data center project announced in April would use entirely wind power, while an enormous, 5,000 megawatt megaproject outside Laredo announced in March hopes to eventually run entirely on private wind, solar and hydrogen power (though it will use gas at first). Another collection of six data centers planned in North Texas hopes to draw 1,400 megawatts from the grid. All together, Texas' grid operator predicts statewide power demand will nearly double within five years, driven largely by data centers for artificial intelligence. It mirrors a similar situation unfolding across the country, according to analysis by S&P Global. 'There is huge concern about the carbon footprint of this stuff,' said Dan Stanzione, executive director of the Texas Advanced Computing Center at the University of Texas at Austin. 'If we could decarbonize the power grid, then there is no carbon footprint for this.' However, despite massive recent expansions of renewable power generation, the boom in artificial intelligence appears to be moving the country farther from, not closer to, its decarbonization goals. Looking forward to a buildout of power supply, state lawmakers have proposed or passed new rules to support deployment of more gas generation and slow the surging expansion of wind and solar power projects. Supporters of these bills say they aim to utilize Texas' position as the nation's top gas producer. Some energy experts say the rules proposed throughout the legislative session could dismantle the state's leadership in renewables as well as the state's ability to provide cheap and reliable power. 'It absolutely would [slow] if not completely stop renewable energy,' said Doug Lewin, a Texas energy consultant, about one of the proposed rules in March. 'That would really be extremely harmful to the Texas economy.' While the bills deemed as 'industry killers' for renewables missed key deadlines, failing to reach Abbott's desk, they illustrate some lawmakers' aspirations for the state's energy industry. One failed bill, Senate Bill 388, would have required every watt of new solar brought online to be accompanied by a watt of new gas. Another set of twin bills, House Bill 3356 and Senate Bill 715, would have forced existing wind and solar companies to buy fossil-fuel based power or connect to a battery storage resource to cover the hours the energy plants are not operating. When the Legislature last met in 2023, it created a $5 billion public 'energy fund' to finance new gas plants but not wind or solar farms. It also created a new tax abatement program that excluded wind and solar. This year's budget added another $5 billion to double the fund. Among the lawmakers leading the effort to scale back the state's deployment of renewables is state Sen. Lois Kolkhorst, a Republican from Brenham. One bill she co-sponsored, SB 819, aimed to create new siting rules for utility-scale renewable projects and would have required them to get permits from the Public Utility Commission that no other energy source — coal, gas or nuclear — needs. 'It's just something that is clearly meant to kneecap an industry,' Lewin said about the bill, which failed to pass. Kolkhorst said the bill sought to balance the state's need for power while respecting landowners across the state. Former state Rep. John Davis, now a board member at Conservative Texans for Energy Innovation, said the session shows how renewables have become a red meat issue. More than 20 years ago, Davis and Kolkhorst worked together in the Capitol as Texas deregulated its energy market, which encouraged renewables to enter the grid's mix, he said. Now Davis herds sheep and goats on his family's West Texas ranch, where seven wind turbines provide roughly 40% of their income. He never could have dreamed how significant renewable energy would become for the state grid, he said. That's why he's disappointed with the direction the Legislature is headed with renewables. 'I can't think of anything more conservative, as a conservative, than wind and solar,' Davis said. 'These are things God gave us — use them and harness them.' A report published in April finds that targeted limitations on solar and wind development in Texas could increase electricity costs for consumers and businesses. The report, done by Aurora Energy Research for the Texas Association of Business, said restricting the further deployment of renewables would drive power prices up 14% by 2035. 'Texas is at a crossroads in its energy future,' said Olivier Beaufils, a top executive at Aurora Energy Research. 'We need policies that support an all-of-the-above approach to meet the expected surge in power demand.' Likewise, the commercial intelligence firm Wood Mackenzie expects the power demand from data centers to drive up prices of gas and wholesale consumer electricity. Even when new power plants aren't built on the site of data centers, they might still be developed because of demand from the server farms. For example, in 2023, developer Marathon Digital started up a Bitcoin mine in the small town of Granbury on the site of the 1,100 megawatt Wolf Hollow II gas power plant. It held contracts to purchase 300 megawatts from the plant. One year later, the power plant operator sought permits to install eight additional 'peaker' gas turbines able to produce up to 352 megawatts of electricity. These small units, designed to turn on intermittently during hours of peak demand, release more pollution than typical gas turbines. Those additional units would be approved to release 796,000 tons per year of greenhouse gases, 251 tons per year of nitrogen oxides and 56 tons per year of soot, according to permitting documents. That application is currently facing challenges from neighboring residents in state administrative courts. About 150 miles away, neighbors are challenging another gas plant permit application in the tiny town of Blue, population 50. At 1,200 megawatts, the $1.2 billion plant proposed by Sandow Lakes Energy Co. would be among the largest in the state and would almost entirely serve private customers, likely including the large data centers that operate about 20 miles away. This plan bothers Hugh Brown, who moved out to these green, rolling hills of rural Lee County in 1975, searching for solitude. Now he lives on 153 wooded acres that he's turned into a sanctuary for wildlife. 'What I've had here is a quiet, thoughtful life,' said Brown, skinny with a long grey beard. 'I like not hearing what anyone else is doing.' He worries about the constant roar of giant cooling fans, the bright lights overnight and the air pollution. According to permitting documents, the power plant would be authorized to emit 462 tons per year of ammonia gas, 254 tons per year of nitrogen oxides, 153 tons per year of particulate matter, or soot, and almost 18 tons per year of 'hazardous air pollutants,' a collection of chemicals that are known to cause cancer or other serious health impacts. It would also be authorized to emit 3.9 million tons of greenhouse gases per year, about as much as 72,000 standard passenger vehicles. 'It would be horrendous,' Brown said. 'There will be a constant roaring of gigantic fans.' In a statement, Sandow Lakes Energy denied that the power plant will be loud. 'The sound level at the nearest property line will be similar to a quiet library,' the statement said. Sandow Lakes Energy said the plant will support the local tax base, provide hundreds of temporary construction jobs and dozens of permanent jobs. Sandow also provided several letters signed by area residents who support the plant. 'We recognize the critical need for reliable, efficient and environmentally responsible energy production to support our region's growth and economic development,' wrote Nathan Bland, president of the municipal development district in Rockdale, about 20 miles from the project site. Sandow says the plant will be connected to Texas' public grid, and many supporting letters for the project cited a need for grid reliability. But according to permitting documents, the 1,200 megawatt plant will supply only 80 megawatts to the grid and only temporarily, with the rest going to private customers. 'Electricity will continue to be sold to the public until all of the private customers have completed projects slated to accept the power being generated,' said a permit review by the Texas Commission on Environmental Quality. Sandow has declined to name those customers. However, the plant is part of Sandow's massive, master-planned mixed-use development in rural Lee and Milam counties, where several energy-hungry tenants are already operating, including Riot Platforms, the largest cryptocurrency mine on the continent. The seven-building complex in Rockdale is built to use up to 700 megawatts, and in April it announced the acquisition of a neighboring, 125 megawatt cryptocurrency mine, previously operated by Rhodium. Another mine by Bitmain, also one of the world's largest Bitcoin companies, has 560 megawatts of operating capacity with plans to add 180 more in 2026. In April, residents of Blue gathered at the volunteer fire department building for a public meeting with Texas regulators and Sandow to discuss questions and concerns over the project. Brown, owner of the wildlife sanctuary, spoke into a microphone and noted that the power plant was placed at the far edge of Sandow's 33,000-acre development, 20 miles from the industrial complex in Rockdale but near many homes in Blue. 'You don't want to put it up into the middle of your property where you could deal with the negative consequences,' Brown said, speaking to the developers. 'So it looks to me like you are wanting to make money, in the process of which you want to strew grief in your path and make us bear the environmental costs of your profit.' Disclosure: Conservative Texans for Energy Innovation, Energy Transfer, the Texas Association of Business, the University of Texas at Austin and the University of Houston have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here. Inside Climate News' Peter Aldhous contributed to this report. First round of TribFest speakers announced! Pulitzer Prize-winning columnist Maureen Dowd; U.S. Rep. Tony Gonzales, R-San Antonio; Fort Worth Mayor Mattie Parker; U.S. Sen. Adam Schiff, D-California; and U.S. Rep. Jasmine Crockett, D-Dallas are taking the stage Nov. 13–15 in Austin. Get your tickets today!
Yahoo
21-05-2025
- Business
- Yahoo
Hays County says AI data center is likely to go forward despite community outcry
HAYS COUNTY, Texas (KXAN) – Concerned residents packed the Hays County Commissioners Court Tuesday to decry plans to build an Artificial Intelligence data center in a rural part of Hays and Guadalupe County. After hearing public comments from around two dozen residents and a presentation from CloudBurst Data Centers – the company behind the project – Hays County Judge Ruben Becerra told the crowd the project would likely go forward as the court has limited power when it comes to development on private property. Hays County is currently reviewing CloudBurst's flood hazard permit application. 'If it meets our requirements, we have an administrative authority to approve the permit,' said Marcus Pacheco, the director of Development Services at Hays County. CloudBurst Data Centers announced plans to build the AI data center in February. Families in a rural part of Hays County quickly learned it would be built in their neighborhood and have been fighting it ever since. 'We're just absolutely destroyed by the prospect of having a data center literally across the road,' said Abigail Lindsey, whose family has owned property near the site for years. 'We're in stage three drought instructions… Also, the noise, the light pollution, and the disturbance of wildlife,' she continued. 'There are oak trees, pecan trees – there's cattle grazing out there right now, and they're just gonna pave over it and it's gonna be concrete and servers.' Lindsey was among those decrying the project on Tuesday. Many others echoed her sentiment, with water being a top concern, both in terms of water use and pollution into San Marcos' waterways. Water is used to cool down equipment within data centers. A large data center can use over 500,000 gallons of water a day, the equivalent of over 4,000 people's daily water use, according to the University of Illinois Urbana-Champaign. CloudBurst said it will recycle its water and attempted to dispel concerns about tainted water leaking into streams. CloudBust said it has not yet determined how much water the center will use. 'I have not seen any studies that show us that there are massive leaks. And even if there is a leak, it leaks into the data center, it doesn't leak out into the field,' said Cynthia Thompson, an executive chairperson with CloudBurst. Thompson attempted to address public concerns in her presentation to the commissioners court. According to the CloudBurst presentation backup documents, the company would attempt to use solar panels, low-level lighting and minimal water. The company said it would not build in a floodplain and would keep noise to a minimum. Thompson said the company is committed to preserving wildlife. 'We have 20 to 30 acres around the creek that'll be in a natural state. We'll add improvements to help wildlife exist there, and then hopefully have a park if the county is willing,' Thompson said. A key part of Thompson's presentation was education on the need for more data centers. 'When you Google someone, when you take a picture, all that goes in the cloud, and so you need more data center space to hold that,' Thompson said. 'We're fulfilling a need in a community.' 'I don't think there's ever a perfect place when you're building a data center,' she continued. 'Never will you have 100% of the people happy.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
06-05-2025
- Business
- Yahoo
Energy Transfer Reports First Quarter 2025 Results
The Partnership continues to expect its 2025 Adjusted EBITDA to be between $16.1 billion and $16.5 billion, and its 2025 growth capital expenditures to be approximately $5 billion. As of March 31, 2025, the Partnership's revolving credit facility had an aggregate $4.37 billion of available borrowing capacity. In April 2025, Energy Transfer announced a quarterly cash distribution of $0.3275 per common unit ($1.31 annualized) for the quarter ended March 31, 2025, which is an increase of more than 3% compared to the first quarter of 2024. In February 2025, Energy Transfer approved construction of an additional natural gas processing plant in the Midland Basin. The Mustang Draw plant will have a processing capacity of approximately 275 MMcf/d and is expected to be in service in the second quarter of 2026. In February 2025, Energy Transfer entered into a long-term agreement with Cloudburst Data Centers, Inc. ("CloudBurst") to provide natural gas to CloudBurst's flagship AI-focused data center development. In April 2025, Energy Transfer entered into a Heads of Agreement with MidOcean Energy ("MidOcean") for the joint development of the Lake Charles LNG project, under which MidOcean would commit to fund 30% of the construction costs and be entitled to receive 30% of the LNG production. During the first quarter of 2025, Energy Transfer commenced construction of Phase I of the Hugh Brinson Pipeline and secured all pipeline steel, which is currently being rolled in U.S. pipe mills. In February 2025, Energy Transfer commissioned the first of eight, 10-megawatt natural gas-fired electric generation facilities to support the Partnership's operations in Texas. Energy Transfer's volumes continued to grow during the first quarter of 2025 compared to the first quarter of 2024. Growth capital expenditures in the first quarter of 2025 were $955 million, while maintenance capital expenditures were $165 million. Distributable Cash Flow attributable to partners, as adjusted, for the three months ended March 31, 2025 was $2.31 billion compared to $2.36 billion for the three months ended March 31, 2024. Adjusted EBITDA for the three months ended March 31, 2025 was $4.10 billion compared to $3.88 billion for the three months ended March 31, 2024. Energy Transfer reported net income attributable to partners for the three months ended March 31, 2025 of $1.32 billion compared to $1.24 billion for the three months ended March 31, 2024. For the three months ended March 31, 2025, net income per common unit (basic) was $0.37. DALLAS, May 06, 2025 --( BUSINESS WIRE )-- Energy Transfer LP (NYSE:ET) ("Energy Transfer" or the "Partnership") today reported financial results for the quarter ended March 31, 2025. Story Continues Energy Transfer benefits from a portfolio of assets with exceptional product and geographic diversity. The Partnership's multiple segments generate high-quality, balanced earnings with no single segment contributing more than one-third of the Partnership's consolidated Adjusted EBITDA for the three months ended March 31, 2025. The vast majority of the Partnership's segment margins are fee-based and therefore have limited commodity price sensitivity. Conference call information: The Partnership has scheduled a conference call for 3:30 p.m. Central Time/4:30 p.m. Eastern Time on Tuesday, May 6, 2025 to discuss its first quarter 2025 results and provide an update on the Partnership. The conference call will be broadcast live via an internet webcast, which can be accessed through and will also be available for replay on the Partnership's website for a limited time. Energy Transfer LP (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with more than 130,000 miles of pipeline and associated energy infrastructure. Energy Transfer's strategic network spans 44 states with assets in all of the major U.S. production basins. Energy Transfer is a publicly traded limited partnership with core operations that include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids ("NGL") and refined product transportation and terminalling assets; and NGL fractionation. Energy Transfer also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights and approximately 21% of the outstanding common units of Sunoco LP (NYSE: SUN), and the general partner interests and approximately 39% of the outstanding common units of USA Compression Partners, LP (NYSE: USAC). For more information, visit the Energy Transfer LP website at Sunoco LP (NYSE: SUN) is a leading energy infrastructure and fuel distribution master limited partnership operating in over 40 U.S. states, Puerto Rico, Europe, and Mexico. SUN's midstream operations include an extensive network of approximately 14,000 miles of pipeline and over 100 terminals. This critical infrastructure complements SUN's fuel distribution operations, which serve approximately 7,400 Sunoco and partner branded locations and additional independent dealers and commercial customers. SUN's general partner is owned by Energy Transfer LP (NYSE: ET). For more information, visit the Sunoco LP website at USA Compression Partners, LP (NYSE: USAC) is one of the nation's largest independent providers of natural gas compression services in terms of total compression fleet horsepower. USAC partners with a broad customer base composed of producers, processors, gatherers, and transporters of natural gas and crude oil. USAC focuses on providing midstream natural gas compression services to infrastructure applications primarily in high-volume gathering systems, processing facilities, and transportation applications. For more information, visit the USAC website at Forward-Looking Statements This news release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management's control. An extensive list of factors that can affect future results, including Adjusted EBITDA, and impact current projections, including capital expenditures, are discussed in the Partnership's Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events. The information contained in this press release is available on our website at ENERGY TRANSFER LP AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (unaudited) March 31, 2025 December 31, 2024 ASSETS Current assets $ 15,237 $ 14,202 Property, plant and equipment, net 95,239 95,212 Investments in unconsolidated affiliates 3,260 3,266 Lease right-of-use assets, net 829 809 Other non-current assets, net 2,069 2,017 Intangible assets, net 5,888 5,971 Goodwill 3,903 3,903 Total assets $ 126,425 $ 125,380 LIABILITIES AND EQUITY Current liabilities $ 13,571 $ 12,656 Long-term debt, less current maturities 59,782 59,752 Non-current operating lease liabilities 752 730 Deferred income taxes 4,179 4,190 Other non-current liabilities 1,561 1,618 Commitments and contingencies Redeemable noncontrolling interests 418 417 Equity: Limited Partners: Preferred Unitholders 3,892 3,852 Common Unitholders 31,364 31,195 General Partner (2 ) (2 ) Accumulated other comprehensive income 64 73 Total partners' capital 35,318 35,118 Noncontrolling interests 10,844 10,899 Total equity 46,162 46,017 Total liabilities and equity $ 126,425 $ 125,380 ENERGY TRANSFER LP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per unit data) (unaudited) Three Months Ended March 31, 2025 2024 REVENUES $ 21,020 $ 21,629 COSTS AND EXPENSES: Cost of products sold 15,571 16,597 Operating expenses 1,299 1,138 Depreciation, depletion and amortization 1,367 1,254 Selling, general and administrative 288 260 Impairment loss 4 — Total costs and expenses 18,529 19,249 OPERATING INCOME 2,491 2,380 OTHER INCOME (EXPENSE): Interest expense, net of interest capitalized (809 ) (728 ) Equity in earnings of unconsolidated affiliates 92 98 Losses on extinguishments of debt (2 ) (5 ) Gain on interest rate derivative — 9 Other, net (11 ) 27 INCOME BEFORE INCOME TAX EXPENSE 1,761 1,781 Income tax expense 41 89 NET INCOME 1,720 1,692 Less: Net income attributable to noncontrolling interests 384 436 Less: Net income attributable to redeemable noncontrolling interests 13 16 NET INCOME ATTRIBUTABLE TO PARTNERS 1,323 1,240 General Partner's interest in net income 1 1 Preferred Unitholders' interest in net income 67 129 Loss on redemption of preferred units — 21 Common Unitholders' interest in net income $ 1,255 $ 1,089 NET INCOME PER COMMON UNIT: Basic $ 0.37 $ 0.32 Diluted $ 0.36 $ 0.32 WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING: Basic 3,431.4 3,368.6 Diluted 3,452.9 3,390.1 ENERGY TRANSFER LP AND SUBSIDIARIES SUPPLEMENTAL INFORMATION (Dollars and units in millions) (unaudited) Three Months Ended March 31, 2025 2024 Reconciliation of net income to Adjusted EBITDA and Distributable Cash Flow(a): Net income $ 1,720 $ 1,692 Depreciation, depletion and amortization 1,367 1,254 Interest expense, net of interest capitalized 809 728 Income tax expense 41 89 Impairment loss 4 — Gain on interest rate derivative — (9 ) Non-cash compensation expense 37 46 Unrealized losses on commodity risk management activities 69 141 Inventory valuation adjustments (Sunoco LP) (61 ) (130 ) Losses on extinguishments of debt 2 5 Adjusted EBITDA related to unconsolidated affiliates 167 171 Equity in earnings of unconsolidated affiliates (92 ) (98 ) Other, net 35 (9 ) Adjusted EBITDA (consolidated) 4,098 3,880 Adjusted EBITDA related to unconsolidated affiliates(b) (167 ) (171 ) Distributable cash flow from unconsolidated affiliates(b) 111 125 Interest expense, net of interest capitalized (809 ) (728 ) Preferred unitholders' distributions (72 ) (118 ) Current income tax expense (57 ) (22 ) Maintenance capital expenditures (202 ) (135 ) Other, net 22 37 Distributable Cash Flow (consolidated) 2,924 2,868 Distributable Cash Flow attributable to Sunoco LP (310 ) (171 ) Distributions from Sunoco LP 64 61 Distributable Cash Flow attributable to USAC (100%) (89 ) (87 ) Distributions from USAC 24 24 Distributable Cash Flow attributable to noncontrolling interests in other non-wholly owned consolidated subsidiaries (308 ) (342 ) Distributable Cash Flow attributable to the partners of Energy Transfer 2,305 2,353 Transaction-related adjustments 2 3 Distributable Cash Flow attributable to the partners of Energy Transfer, as adjusted $ 2,307 $ 2,356 Distributions to partners: Limited Partners $ 1,124 $ 1,070 General Partner 1 1 Total distributions to be paid to partners $ 1,125 $ 1,071 Common Units outstanding – end of period 3,431.7 3,369.9 (a) Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures used by industry analysts, investors, lenders and rating agencies to assess the financial performance and the operating results of Energy Transfer's fundamental business activities and should not be considered in isolation or as a substitute for net income, income from operations, cash flows from operating activities or other GAAP measures. There are material limitations to using measures such as Adjusted EBITDA and Distributable Cash Flow, including the difficulty associated with using either as the sole measure to compare the results of one company to another, and the inability to analyze certain significant items that directly affect a company's net income or loss or cash flows. In addition, our calculations of Adjusted EBITDA and Distributable Cash Flow may not be consistent with similarly titled measures of other companies and should be viewed in conjunction with measures that are computed in accordance with GAAP, such as operating income, net income and cash flows from operating activities. Definition of Adjusted EBITDA We define Adjusted EBITDA as total partnership earnings before interest, taxes, depreciation, depletion, amortization and other non-cash items, such as non-cash compensation expense, gains and losses on disposals of assets, the allowance for equity funds used during construction, unrealized gains and losses on commodity risk management activities, inventory valuation adjustments, non-cash impairment charges, losses on extinguishments of debt and other non-operating income or expense items. Inventory valuation adjustments that are excluded from the calculation of Adjusted EBITDA represent only the changes in lower of cost or market reserves on inventory that is carried at last-in, first-out ("LIFO"). These amounts are unrealized valuation adjustments applied to Sunoco LP's fuel volumes remaining in inventory at the end of the period. Adjusted EBITDA reflects amounts for unconsolidated affiliates based on the same recognition and measurement methods used to record equity in earnings of unconsolidated affiliates. Adjusted EBITDA related to unconsolidated affiliates excludes the same items with respect to the unconsolidated affiliate as those excluded from the calculation of Adjusted EBITDA, such as interest, taxes, depreciation, depletion, amortization and other non-cash items. Although these amounts are excluded from Adjusted EBITDA related to unconsolidated affiliates, such exclusion should not be understood to imply that we have control over the operations and resulting revenues and expenses of such affiliates. We do not control our unconsolidated affiliates; therefore, we do not control the earnings or cash flows of such affiliates. The use of Adjusted EBITDA or Adjusted EBITDA related to unconsolidated affiliates as an analytical tool should be limited accordingly. Adjusted EBITDA is used by management to determine our operating performance and, along with other financial and volumetric data, as internal measures for setting annual operating budgets, assessing financial performance of our numerous business locations, as a measure for evaluating targeted businesses for acquisition and as a measurement component of incentive compensation. Definition of Distributable Cash Flow We define Distributable Cash Flow as net income, adjusted for certain non-cash items, less distributions to preferred unitholders and maintenance capital expenditures. Non-cash items include depreciation, depletion and amortization, non-cash compensation expense, amortization included in interest expense, gains and losses on disposals of assets, the allowance for equity funds used during construction, unrealized gains and losses on commodity risk management activities, inventory valuation adjustments, non-cash impairment charges, losses on extinguishments of debt and deferred income taxes. For unconsolidated affiliates, Distributable Cash Flow reflects the Partnership's proportionate share of the investees' distributable cash flow. Distributable Cash Flow is used by management to evaluate our overall performance. Our partnership agreement requires us to distribute all available cash, and Distributable Cash Flow is calculated to evaluate our ability to fund distributions through cash generated by our operations. On a consolidated basis, Distributable Cash Flow includes 100% of the Distributable Cash Flow of Energy Transfer's consolidated subsidiaries. However, to the extent that noncontrolling interests exist among our subsidiaries, the Distributable Cash Flow generated by our subsidiaries may not be available to be distributed to our partners. In order to reflect the cash flows available for distributions to our partners, we have reported Distributable Cash Flow attributable to partners, which is calculated by adjusting Distributable Cash Flow (consolidated), as follows: For subsidiaries with publicly traded equity interests, Distributable Cash Flow (consolidated) includes 100% of Distributable Cash Flow attributable to such subsidiary, and Distributable Cash Flow attributable to our partners includes distributions to be received by the parent company with respect to the periods presented. For consolidated joint ventures or similar entities, where the noncontrolling interest is not publicly traded, Distributable Cash Flow (consolidated) includes 100% of Distributable Cash Flow attributable to such subsidiaries, but Distributable Cash Flow attributable to partners reflects only the amount of Distributable Cash Flow of such subsidiaries that is attributable to our ownership interest. For Distributable Cash Flow attributable to partners, as adjusted, certain transaction-related adjustments and non-recurring expenses that are included in net income are excluded. (b) These amounts exclude Sunoco LP's Adjusted EBITDA and distributable cash flow related to its investment in the ET-S Permian joint venture, which amounts are eliminated in the Energy Transfer consolidation. ENERGY TRANSFER LP AND SUBSIDIARIES SUMMARY ANALYSIS OF QUARTERLY RESULTS BY SEGMENT (Tabular dollar amounts in millions) (unaudited) Three Months Ended March 31, 2025 2024 Segment Adjusted EBITDA: Intrastate transportation and storage $ 344 $ 438 Interstate transportation and storage 512 483 Midstream 925 696 NGL and refined products transportation and services 978 989 Crude oil transportation and services 742 848 Investment in Sunoco LP 458 242 Investment in USAC 150 139 All other (11 ) 45 Adjusted EBITDA (consolidated) $ 4,098 $ 3,880 The following analysis of segment operating results includes a measure of segment margin. Segment margin is a non-GAAP financial measure and is presented herein to assist in the analysis of segment operating results and particularly to facilitate an understanding of the impacts that changes in sales revenues have on the segment performance measure of Segment Adjusted EBITDA. Segment margin is similar to the GAAP measure of gross margin, except that segment margin excludes charges for depreciation, depletion and amortization. Among the GAAP measures reported by the Partnership, the most directly comparable measure to segment margin is Segment Adjusted EBITDA; a reconciliation of segment margin to Segment Adjusted EBITDA is included in the following tables for each segment where segment margin is presented. Intrastate Transportation and Storage Three Months Ended March 31, 2025 2024 Natural gas transported (BBtu/d) 14,220 14,177 Withdrawals from storage natural gas inventory (BBtu) 8,225 8,230 Revenues $ 1,294 $ 918 Cost of products sold 964 487 Segment margin 330 431 Unrealized losses on commodity risk management activities 76 64 Operating expenses, excluding non-cash compensation expense (57 ) (53 ) Selling, general and administrative expenses, excluding non-cash compensation expense (14 ) (12 ) Adjusted EBITDA related to unconsolidated affiliates 6 7 Other 3 1 Segment Adjusted EBITDA $ 344 $ 438 Transported volumes of gas on our Texas and Oklahoma intrastate pipelines increased primarily due to more third party transportation, partially offset by lower gas production from the Haynesville area. Transported volumes reported above exclude volumes attributable to purchases and sales of gas for our pipelines' own accounts and the optimization of any unused capacity. Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our intrastate transportation and storage segment decreased due to the net impact of the following: a decrease of $122 million in realized natural gas sales and other primarily due to lower pipeline optimization as a result of lower volatility in natural gas prices; and an increase of $4 million in operating expenses primarily due to increases in project costs, employee costs and ad valorem taxes; partially offset by an increase of $26 million in storage margin primarily due to higher storage optimization; and an increase of $8 million in retained fuel margin primarily due to higher gas prices. Interstate Transportation and Storage Three Months Ended March 31, 2025 2024 Natural gas transported (BBtu/d) 18,204 17,665 Natural gas sold (BBtu/d) 33 23 Revenues $ 621 $ 602 Cost of products sold 2 1 Segment margin 619 601 Operating expenses, excluding non-cash compensation, amortization, accretion and other non-cash expenses (189 ) (203 ) Selling, general and administrative expenses, excluding non-cash compensation, amortization and accretion expenses (37 ) (33 ) Adjusted EBITDA related to unconsolidated affiliates 119 118 Segment Adjusted EBITDA $ 512 $ 483 Transported volumes increased primarily due to more capacity sold and higher utilization on our Panhandle, Trunkline and Gulf Run systems due to increased demand. Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our interstate transportation and storage segment increased due to the net impact of the following: an increase of $18 million in segment margin primarily due to a $9 million increase in operational gas sales resulting from higher prices, a $5 million increase in storage and parking revenue and a $4 million increase in transportation revenue from several of our interstate pipeline systems due to higher contracted volumes at higher rates; a decrease of $14 million in operating expenses primarily due to lower maintenance costs; and an increase of $1 million in Adjusted EBITDA related to unconsolidated affiliates primarily due to an increase from our Southeast Supply Header joint venture; partially offset by an increase of $4 million in selling, general and administrative expenses primarily due to an increase in employee costs. Midstream Three Months Ended March 31, 2025 2024 Gathered volumes (BBtu/d) 20,411 19,922 NGLs produced (MBbls/d) 1,090 890 Equity NGLs (MBbls/d) 60 52 Revenues $ 3,656 $ 2,774 Cost of products sold 2,260 1,719 Segment margin 1,396 1,055 Operating expenses, excluding non-cash compensation expense (421 ) (323 ) Selling, general and administrative expenses, excluding non-cash compensation expense (56 ) (44 ) Adjusted EBITDA related to unconsolidated affiliates 5 6 Other 1 2 Segment Adjusted EBITDA $ 925 $ 696 Gathered volumes increased primarily due to newly acquired assets and higher volumes in the Permian region, partially offset by declines in other regions. NGL production increased primarily due to recently acquired assets and increased Permian plant utilization. Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our midstream segment increased due to the net impact of the following: an increase of $153 million in segment margin primarily due to recently acquired assets and higher volumes in the Permian region; an increase of $160 million in segment margin due to the non-recurring recognition of certain amounts associated with Winter Storm Uri in 2021, which represents the remainder of midstream segment margin from Winter Storm Uri that had not already been recognized. In our intrastate transportation and storage segment, a total of approximately $285 million of previously invoiced amounts, excluding interest, related to Winter Storm Uri are currently disputed by customers and remain unrecognized, of which approximately $263 million is due from CPS Energy; and an increase of $28 million in segment margin due to higher natural gas prices of $35 million offset by lower NGL prices of $7 million; partially offset by an increase of $98 million in operating expenses primarily due to recent acquisitions and assets placed in service; and an increase of $12 million in selling, general and administrative expenses due to higher corporate allocations, as well as the impact of a $5 million decrease in workers' compensation reserve in the prior period. NGL and Refined Products Transportation and Services Three Months Ended March 31, 2025 2024 NGL transportation volumes (MBbls/d) 2,169 2,087 Refined products transportation volumes (MBbls/d) 574 573 NGL and refined products terminal volumes (MBbls/d) 1,453 1,395 NGL fractionation volumes (MBbls/d) 1,089 1,053 Revenues $ 6,909 $ 6,526 Cost of products sold 5,641 5,319 Segment margin 1,268 1,207 Unrealized (gains) losses on commodity risk management activities (26 ) 22 Operating expenses, excluding non-cash compensation expense (247 ) (228 ) Selling, general and administrative expenses, excluding non-cash compensation expense (48 ) (42 ) Adjusted EBITDA related to unconsolidated affiliates 31 30 Segment Adjusted EBITDA $ 978 $ 989 NGL transportation volumes increased primarily due to higher volumes from the Permian region and on our Mariner East pipeline system. The increase in transportation volumes also led to higher fractionated volumes at our Mont Belvieu NGL Complex. Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our NGL and refined products transportation and services segment decreased due to the net impact of the following: an increase of $19 million in operating expenses primarily due to a $10 million increase in gas and power utility costs and a $6 million increase in employee costs; a decrease of $15 million in fractionators and refinery services margin primarily due to lower gains from blending activities; and an increase of $6 million in selling, general and administrative expenses primarily due to increased costs from recently acquired assets; partially offset by an increase of $24 million in terminal services margin primarily due to a $22 million increase in fees from loading NGL volumes for export at our Nederland and Marcus Hook terminals and a $2 million increase from higher throughput and storage at our refined product terminals; and an increase of $2 million in storage margin primarily due to the timing of deficiency payments. Crude Oil Transportation and Services Three Months Ended March 31, 2025 2024 Crude oil transportation volumes (MBbls/d) 6,719 6,102 Crude oil terminal volumes (MBbls/d) 3,325 3,241 Revenues $ 6,208 $ 7,638 Cost of products sold 5,214 6,594 Segment margin 994 1,044 Unrealized losses on commodity risk management activities — 19 Operating expenses, excluding non-cash compensation expense (213 ) (188 ) Selling, general and administrative expenses, excluding non-cash compensation expense (44 ) (36 ) Adjusted EBITDA related to unconsolidated affiliates 6 9 Other (1 ) — Segment Adjusted EBITDA $ 742 $ 848 Crude oil transportation volumes were higher due to continued growth on our gathering systems and from assets contributed upon the recent formation of the ET-S Permian joint venture with Sunoco LP, partially offset by lower volumes on our Bakken Pipeline. Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our crude oil transportation and services segment decreased due to the net impact of the following: a decrease of $69 million in segment margin (excluding unrealized losses on commodity risk management activities) due to decreased transportation and the timing of optimization losses realized during the quarter which we expect to partially reverse in future periods, partially offset by increases from assets contributed upon the formation of ET-S Permian; an increase of $25 million in operating expenses primarily due to a $9 million increase from assets contributed upon the formation of ET-S Permian, a $7 million increase in volume-driven expenses, and a $5 million increase in employee expenses; an increase of $8 million in selling, general and administrative expenses primarily due to costs associated with ET-S Permian; and a decrease of $3 million in Adjusted EBITDA related to unconsolidated affiliates due to lower volumes and lower re-contracted rates. Investment in Sunoco LP Three Months Ended March 31, 2025 2024 Revenues $ 5,179 $ 5,499 Cost of products sold 4,526 5,015 Segment margin 653 484 Unrealized (gains) losses on commodity risk management activities (1 ) 13 Operating expenses, excluding non-cash compensation expense (158 ) (105 ) Selling, general and administrative expenses, excluding non-cash compensation expense (36 ) (32 ) Adjusted EBITDA related to unconsolidated affiliates 50 3 Inventory fair value adjustments (61 ) (130 ) Other, net 11 9 Segment Adjusted EBITDA $ 458 $ 242 The investment in Sunoco LP segment reflects the consolidated results of Sunoco LP. Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our investment in Sunoco LP increased due to the net impact of the following: an increase of $224 million in segment margin (excluding unrealized gains and losses on commodity risk management activities and inventory valuation adjustments) primarily due to the acquisitions of NuStar and Zenith European terminals; and an increase of $47 million in Adjusted EBITDA related to unconsolidated affiliates due to the formation of ET-S Permian; partially offset by an increase of $53 million in operating expenses and $4 million in selling, general and administrative expenses primarily due to the acquisitions of NuStar and Zenith European terminals. Investment in USAC Three Months Ended March 31, 2025 2024 Revenues $ 245 $ 229 Cost of products sold 38 36 Segment margin 207 193 Operating expenses, excluding non-cash compensation expense (43 ) (39 ) Selling, general and administrative expenses, excluding non-cash compensation expense (14 ) (15 ) Segment Adjusted EBITDA $ 150 $ 139 The investment in USAC segment reflects the consolidated results of USAC. Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our investment in USAC segment increased due to the net impact of the following: an increase of $14 million in segment margin primarily due to higher market-based rates on newly deployed and redeployed compression units and higher average rates on existing customer contracts, and higher revenue-generating horsepower as a result of increased demand for compression services; partially offset by an increase of $4 million in operating expenses primarily due to an increase in employee costs associated with increased revenue-generating horsepower. All Other Three Months Ended March 31, 2025 2024 Revenues $ 995 $ 466 Cost of products sold 995 451 Segment margin — 15 Unrealized losses on commodity risk management activities 20 23 Operating expenses, excluding non-cash compensation expense (1 ) (6 ) Selling, general and administrative expenses, excluding non-cash compensation expense (13 ) (12 ) Adjusted EBITDA related to unconsolidated affiliates — 1 Other and eliminations (17 ) 24 Segment Adjusted EBITDA $ (11 ) $ 45 Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our all other segment decreased due to the net impact of the following: a decrease of $47 million due to intersegment eliminations of Sunoco LP's 32.5% share of ET-S Permian, which is consolidated in our crude oil transportation and services segment and also reflected as an unconsolidated affiliate in our investment in Sunoco LP segment; and a decrease of $13 million in our natural gas marketing business due to the timing of gains on stored natural gas in the prior period; partially offset by an increase of $3 million in rental income on recently acquired real estate. ENERGY TRANSFER LP AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ON LIQUIDITY (In millions) (unaudited) The table below provides information on our revolving credit facility. We also have consolidated subsidiaries with revolving credit facilities which are not included in this table. Facility Size Funds Available at March 31, 2025 Maturity Date Five-Year Revolving Credit Facility $ 5,000 $ 4,372 April 11, 2029 ENERGY TRANSFER LP AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ON UNCONSOLIDATED AFFILIATES (In millions) (unaudited) The table below provides information on an aggregated basis for our unconsolidated affiliates, which are accounted for as equity method investments in the Partnership's financial statements for the periods presented. Three Months Ended March 31, 2025 2024 Equity in earnings of unconsolidated affiliates: Citrus $ 33 $ 37 MEP 17 17 White Cliffs 3 6 Explorer 7 6 SESH 14 10 Other 18 22 Total equity in earnings of unconsolidated affiliates $ 92 $ 98 Adjusted EBITDA related to unconsolidated affiliates: Citrus $ 79 $ 81 MEP 26 26 White Cliffs 8 11 Explorer 11 10 SESH 15 13 Other 28 30 Total Adjusted EBITDA related to unconsolidated affiliates $ 167 $ 171 Distributions received from unconsolidated affiliates: Citrus $ 30 $ 33 MEP 26 23 White Cliffs 9 11 Explorer 5 8 SESH 8 18 Other 19 14 Total distributions received from unconsolidated affiliates $ 97 $ 107 ENERGY TRANSFER LP AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ON NON-WHOLLY OWNED JOINT VENTURE SUBSIDIARIES (In millions) (unaudited) The table below provides information on an aggregated basis for our non-wholly owned joint venture subsidiaries, which are reflected on a consolidated basis in our financial statements. The table below excludes Sunoco LP and USAC, which are non-wholly owned subsidiaries that are publicly traded, as well as Sunoco LP's 32.5% interest in the ET-S Permian joint venture. Three Months Ended March 31, 2025 2024 Adjusted EBITDA of non-wholly owned subsidiaries (100%) (a) $ 607 $ 669 Our proportionate share of Adjusted EBITDA of non-wholly owned subsidiaries (b) 297 321 Distributable Cash Flow of non-wholly owned subsidiaries (100%) (c) $ 587 $ 645 Our proportionate share of Distributable Cash Flow of non-wholly owned subsidiaries (d) 279 303 Below is our ownership percentage of certain non-wholly owned subsidiaries: Non-wholly owned subsidiary: Energy Transfer Percentage Ownership (e) Bakken Pipeline 36.4 % Bayou Bridge 60.0 % Maurepas 51.0 % Ohio River System 75.0 % Permian Express Partners 87.7 % Red Bluff Express 70.0 % Rover 32.6 % Others various (a) Adjusted EBITDA of non-wholly owned subsidiaries reflects the total Adjusted EBITDA of our non-wholly owned subsidiaries on an aggregated basis. This is the amount included in our consolidated non-GAAP measure of Adjusted EBITDA. (b) Our proportionate share of Adjusted EBITDA of non-wholly owned subsidiaries reflects the amount of Adjusted EBITDA of such subsidiaries (on an aggregated basis) that is attributable to our ownership interest. (c) Distributable Cash Flow of non-wholly owned subsidiaries reflects the total Distributable Cash Flow of our non-wholly owned subsidiaries on an aggregated basis. (d) Our proportionate share of Distributable Cash Flow of non-wholly owned subsidiaries reflects the amount of Distributable Cash Flow of such subsidiaries (on an aggregated basis) that is attributable to our ownership interest. This is the amount included in our consolidated non-GAAP measure of Distributable Cash Flow attributable to the partners of Energy Transfer. (e) Our ownership reflects the total economic interest held by us and our subsidiaries. In some cases, this percentage comprises ownership interests held in (or by) multiple entities. View source version on Contacts Energy Transfer Investor Relations: Bill Baerg, Brent Ratliff, Lyndsay Hannah, 214-981-0795 or Media Relations: Vicki Granado, 214-840-5820
Yahoo
23-03-2025
- Business
- Yahoo
Should You Buy Energy Transfer While It Trades Below $20?
The energy midstream sector has held up better than most stock sectors during the recent market sell-off. However, that doesn't mean there aren't bargains in the space to still be found. One stock in the sector trading about 10% off its January 2025 highs is Energy Transfer (NYSE: ET). Let's look at why the stock is a good buy while it is still trading at under $20. The midstream energy sector finds itself in a favorable environment at the moment. The Trump administration has made fossil fuels and increasing production a priority over green energy alternatives. Meanwhile, artificial intelligence (AI) is creating strong demand for power because running AI workloads is an energy-intensive process. As the owner of one of the country's largest integrated midstream systems, Energy Transfer is particularly well-positioned to take advantage of increasing volumes and emerging projects. The company has a strong presence in the Permian Basin, which is the country's most important oil basin. However, it is not Permian oil from which Energy Transfer is benefiting the most. The Permian also produces a lot of natural gas. Since this natural gas is not the primary reason companies drill this acreage, it is generally referred to as associated natural gas, and producers are often more concerned about getting rid of it than profiting from it. Producers used to flare (burn-off) much of this gas, but state environmental regulations generally have some types of limits on flaring nowadays. While the Permian's oil pipeline systems have long been built out (overbuilt, in fact), the basin has consistently struggled to keep up with natural gas takeaway. This has led the region to have some of the cheapest natural gas prices in the country, with prices falling into negative territory at the nearby Waha hub at points last year. Energy Transfer's system has good access to this cheap natural gas, which it can then transport to other parts of the country through its extensive system of intrastate and interstate pipelines. As such, it is not surprising that the company has gotten so much inbound interest from power companies and data centers looking to connect to its system. Given the opportunities the company is seeing in this environment, it has upped its capital expenditure (capex) budget this year to take advantage of attractive project economics. The company has now budgeted spending $5 billion in growth capex this year as it enters a new growth-oriented phase. That's up from $3 billion in 2024. Energy Transfer has a number of attractive projects in the works. One of its biggest is the Hugh Brinson Pipeline, which will add more natural gas takeaway from the Permian and help support the growing energy needs of data centers being built in Texas. Meanwhile, it signed a deal with data center developer CloudBurst last month to provide natural gas to an AI data center it has planned for Central Texas. The company is also directing a lot of its spending toward additional natural gas processing expansions and additions in the Permian. In addition, Energy Transfer is looking to make a final investment decision (FID) on its long-anticipated Lake Charles LNG (liquified natural gas) project by year-end. The Biden administration had put a pause on LNG plants in 2024, which has since been reversed by President Donald Trump. At the end of last year, Energy Transfer signed a 20-year sale and purchase agreement with energy giant Chevron if the project proceeds. This is a huge project that would help fuel even more growth for Energy Transfer in later years. The company is also a huge energy arbitrageur, being able to take advantage of regional and seasonable price discrepancies. Lake Charles would allow Energy Transfer a new outlet into international markets. At under $20, Energy Transfer's stock is cheap. Midstream companies are typically valued using an enterprise value (EV)-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) metric. The reason for this is that these are capital-intensive businesses, and, as such, the companies carry debt in order to build out their pipeline systems. Their capex spending is therefore captured in their debt, which EV takes into account. EBITDA, meanwhile, takes out non-cash depreciation expenses. When companies spend money on capex, the upfront costs are not taken out all at once when a company reports earnings. Instead, they are spread out over the useful life of the asset, although the actual useful lives for pipelines tend to be much longer than their depreciation schedules. EBITDA takes out these non-cash costs that were already spent, as they have been captured in the company's debt. On an EV/EBITDA basis, Energy Transfer trades at a multiple of under 8.3 times on 2025 analyst estimates. That is lower than most of its midstream master limited partnership (MLP) peers, as well as from a historical basis. The group, on average, carried a 13.7 times EV/EBITDA multiple between 2011 and 2016. As such, Energy Transfer stock looks like a great buy under $20. The company is seeing one of the best growth environments it's seen for quite some time, while the stock is cheap on both a relative and historical basis. It also carries a well-covered 6.9% forward yield to boot. Before you buy stock in Energy Transfer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Energy Transfer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $726,481!* Now, it's worth noting Stock Advisor's total average return is 835% — a market-crushing outperformance compared to 164% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of March 18, 2025 Geoffrey Seiler has positions in Energy Transfer, Enterprise Products Partners, and Western Midstream Partners. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy. Should You Buy Energy Transfer While It Trades Below $20? was originally published by The Motley Fool
Globe and Mail
20-03-2025
- Business
- Globe and Mail
Yielding Almost 7%, This Dividend Stock Is a Buy on Trump's Policies and AI
While concerns over President Donald Trump's trade and immigration policies have pulled down broader markets, some sectors stand to benefit from them. This includes the fossil fuel and energy sector. In the energy space, Energy Transfer (ET) is one stock that stands to benefit not only from Trump's policies, but also from the pivot toward artificial intelligence (AI). The cherry on the top is its almost 7% yield which looks quite juicy compared to its peers and broader markets. Along with the fat dividend, ET brings prospects of capital appreciation to the table, as we'll discuss in this article. Energy Transfer's Management Has Been All Praise for Trump's Policies While several companies have expressed apprehensions over Trump's policies, such as those in the automotive industry, Energy Transfer's management was all praise for the new administration. During the Q4 earnings call, Energy Transfer co-CEO Marshal McCrea said, 'We have a president and an administration that loves this country, that fully recognizes how blessed we are with not only fossil fuel resources but a lot of resources, a lot of resources that are needed in this renewable push.' He discussed the administration's push for 'sensible' regulations while touting the energy export opportunity. AI Energy Demand Could Fuel ET's Growth Natural gas (NGJ25) demand is expected to spike as AI fuels electricity demand. Energy Transfer announced a long-term agreement with CloudBurst data centers and will provide natural gas to their data center in Texas. It was the company's first commercial deal to supply natural gas to a data center directly and it stressed that 'it will not be the last.' During the Q4 earnings call, ET said that it has received requests from 70 prospective data centers spread across 12 states. Additionally, the company said it has received inbound requests from over 60 power plants that it does not currently serve and another 15 that it is currently supplying. The company expects to spend $5 billion on growth capex in 2025 which is significantly higher than the previous year. The majority of these projects will come online next year and their earnings will ramp up in 2026 and 2027. Energy Transfer expects its growth to stay strong through the end of this decade as the company invests to expand its portfolio. Energy Transfer's Dividend Policy Midstream companies are known to pay generous dividends and Energy Transfer intends to increase its distribution by between 3%-5% annually. During the Q4 earnings call, responding to an analyst question over distributions, Co-CEO Thomas Long said that the company would stick to that range even as it guided for earnings before interest tax, depreciation, and amortization (EBITDA) growth of 5% at the midpoint for 2025. Here, it's worth noting that while the company places a great emphasis on its dividends, they are not certain. In 2020, Energy Transfer was forced to cut its distribution by half. At the time, with the pandemic greatly impacting energy demand, several companies either cut their dividends or suspended them altogether. However, ET has since raised its dividend, and the current payout is higher than what it was before the cut. The company used its cash flows to pare down some of its debt and its balance sheet is now in a much better shape. Energy Transfer Stock Forecast Brokerages are quite bullish on Energy Transfer, and of the 14 analysts covering ET stock, 12 rate it a 'Strong Buy,' while one says it's a 'Buy.' One analyst rates the stock a 'Hold,' and the mean target price of $23 is 21.7% higher than the March 17 closing price. ET stock trades even below the Street-low target price of $20, while its Street-high target price of $25 is 32.2% higher. The Final Verdict: ET Looks Like a Buy ET stock trades at a forward enterprise value-to-EBITDA multiple of 8.6x which does not look demanding considering the growth opportunity in the form of energy exports and AI. There have previously been concerns over its corporate governance and weak balance sheet, but Energy Transfer has now mostly addressed these issues. Energy Transfer has fallen roughly 12.5% from its 2025 highs and I see the fall as a good opportunity to buy this high-dividend stock.
