Key Takeaways ET to expand the Transwestern Desert Southwest project, raising capacity using larger 48-inch pipelines.Natural gas demand in Arizona and New Mexico is rising due to population growth and data center development.The project's estimated total cost is $5.6 billion, supported by long-term shipping contracts.Energy Transfer LP (ET) announced plans to expand the Transwestern Pipeline as part of its Desert Southwest expansion project. The company will increase the pipeline diameter to 48 inches from ...

Core Insights - Energy Transfer LP is expanding its asset footprint in the Permian Basin through the Transwestern Pipeline to serve growing markets in Arizona [1] Group 1: Company Expansion - The expansion of the Transwestern Pipeline is aimed at enhancing service capabilities in the Permian Basin [1] - This strategic move is intended to meet the increasing demand in the Arizona market [1]

Core Viewpoint - Energy Transfer LP is expanding its asset footprint in the Permian Basin by enhancing the Transwestern Pipeline to cater to the increasing markets in Arizona [1] Group 1: Company Expansion - The expansion of the Transwestern Pipeline is aimed at serving the growing demand in Arizona [1]

Core Viewpoint - Energy Transfer's growth has significantly slowed in 2025, with a decline in unit prices and underperformance compared to the S&P 500, despite a strong previous year [1][2]. Financial Performance - In 2024, Energy Transfer achieved a record $15.5 billion in adjusted EBITDA, a 13% increase from 2023 [4]. - The company generated $8.4 billion in distributable cash flow in 2024, marking a 10% year-over-year increase [5]. - For the first half of 2025, adjusted EBITDA was nearly $8 billion, reflecting a 4% increase, while distributable cash flow was $5.5 billion, showing less than 1% growth [6]. Growth Outlook - Energy Transfer expects adjusted EBITDA for 2025 to be at or slightly below the lower end of its guidance range of $16.1 billion to $16.5 billion, indicating less than 4% growth compared to 2024 [7]. - The company is investing $5 billion in growth capital projects in 2025, with many projects expected to come online by the end of 2026 [8]. - Recent completions include two new gas processing plants, with another scheduled for completion in the second quarter of next year [9]. Expansion Projects - Energy Transfer is finalizing the Nederland Flexport NGL expansion and the Hugh Brinson Pipeline, which are expected to significantly boost earnings and cash flow in 2026 and 2027 [10]. - The Desert Southwest expansion of the Transwestern Pipeline, a $5.3 billion project, is anticipated to be operational by the end of the decade [11]. - The company is also advancing the long-delayed Lake Charles LNG export project and exploring additional projects to supply gas to new power plants and data centers [12]. Financial Position - Energy Transfer is in its strongest financial position to date, allowing for potential acquisitions as opportunities arise [13]. - Although no deals have been made this year, its affiliate Sunoco LP has agreed to acquire Parkland for $9.1 billion, expected to enhance earnings by over 10% in the first year [14]. Investment Opportunity - Despite the slowdown in growth, the recent dip in unit prices may present a buying opportunity, especially for investors willing to accept the Schedule K-1 tax form [15]. - Investors can benefit from a distribution yield of over 7.5%, which is expected to grow as income rises, positioning them for a high total return [16].