Energy Transfer's Growth Outlook Just Keeps Getting Better

Core Viewpoint - Energy Transfer is positioned for growth despite a recent decline in earnings, with several expansion projects and new gas supply agreements expected to drive future cash flow and total returns for investors [1][2][13]. Financial Performance - In the third quarter, Energy Transfer generated $3.8 billion in adjusted EBITDA, down from $4 billion year-over-year, and produced $1.9 billion in distributable cash flow, below last year's $2 billion [3][4]. - The company has generated nearly $6.2 billion in cash this year, covering $3.4 billion in distributions to investors [4][6]. - Adjusted EBITDA is projected to be slightly below the lower end of the guidance range of $16.1 billion to $16.5 billion, indicating nearly 4% growth from the previous year [7]. Growth Initiatives - Energy Transfer is investing $4.6 billion in growth capital projects this year and plans to allocate another $5 billion in 2026, which will support several expansion projects [8]. - Recent completions include the Nederland Flexport NGL expansion and the relocation of the Badger gas processing plant, with additional projects like the Mustang Draw gas processing plant expected to be completed next year [9]. New Contracts and Supply Agreements - The company has signed long-term gas supply agreements with Oracle for three U.S. data centers, with initial flows expected by the end of this year [10]. - Additional agreements include gas supply deals with CloudBurst, Fermi, and Entergy, which will contribute to cash flow starting in 2028 [11]. Long-term Expansion Projects - Energy Transfer is developing several long-term projects expected to come online between 2027 and 2029, including the Hugh Brinson Phase II and the Desert Southwest Expansion project [12]. - The company has potential projects in the pipeline, such as the proposed Lake Charles LNG export terminal and Dakota Access oil pipeline expansion, which will enhance its long-term growth outlook [12].