Energy Transfer NYSE: ET reported higher first-quarter 2026 earnings as management pointed to strong operations and record volumes across multiple parts of its midstream system, while also raising full-year guidance on the back of what it described as broad-based outperformance.
First-quarter results driven by record volumes and optimization
Co-CEO Thomas E. Long said the partnership generated adjusted EBITDA of approximately $4.9 billion in the first quarter of 2026, up from about $4.1 billion in the year-ago quarter. Distributable cash flow (DCF) attributable to partners, as adjusted, was approximately $2.7 billion, compared with about $2.3 billion in the first quarter of 2025.
Long attributed the quarter to “strong operations,” citing record midstream gathering volumes, NGL fractionation volumes, NGL export volumes, and crude oil transportation volumes. Energy Transfer spent about $1.5 billion on organic growth capital during the quarter, primarily in the intrastate NGL and refined products, midstream, and interstate segments (excluding Sun and USA Compression capital spending).
Updated 2026 outlook: higher EBITDA and growth capital
Long said Energy Transfer raised its 2026 adjusted EBITDA guidance range to approximately $18.2 billion to $18.6 billion. The prior range, as stated on the call, was approximately $7.45 billion to $17.85 billion. Long said the updated outlook reflects a roughly $500 million beat versus internal expectations in the first quarter and that the partnership captured its full-year optimization target in the first quarter, alongside expectations for continued outperformance.
The company also increased its 2026 organic growth capital guidance to approximately $5.5 billion to $5.9 billion, up from about $5.0 billion to $5.5 billion (excluding Sunoco and USAC). Long said the increase was driven by added projects, including:
- Construction of the Springerville Lateral off the Transwestern Pipeline
- Pipelines and meter stations to serve power plants and data center sites in Oklahoma and Arkansas
- Accelerated timing on longer-term projects including Desert Southwest and the FGT capital program
- Permian gathering system and compression build-out tied to contract and acreage dedication extensions
Segment performance: NGL strength, crude growth, and storm impacts
In NGL and refined products, adjusted EBITDA was approximately $1.2 billion, compared with about $978 million a year earlier. Long cited higher throughput on Gulf Coast pipelines, record performance at the Mont Belvieu fractionators, and higher earnings tied to chilling capacity that came online last year. He also noted record export volumes from the Nederland terminal and $65 million of higher gains related to the timing of settlement of NGL and refined product inventory hedges.
Midstream adjusted EBITDA was approximately $887 million, down from about $925 million in the first quarter of 2025. Long said base business earnings increased due to Permian growth, with volumes up 8% from new and upgraded processing plants, but results were pressured by a $25 million decrease due to lower NGL natural gas prices. He also reminded investors that the prior-year quarter included $160 million of revenue recognition tied to Winter Storm Uri.
In crude oil, adjusted EBITDA rose to approximately $869 million from about $742 million a year earlier. Long said the segment benefited from continued growth across crude oil pipeline and gathering systems, as well as a $60 million gain tied to higher crude oil inventory values from rising prices, which he said is expected to be “mostly offset with hedge losses during the second quarter.” He also said Energy Transfer recognized $43 million of revenue previously reserved related to the recontracting and extension of a legacy shipper contract during the Dakota Access Pipeline (DAPL) open season, and noted lower expenses due to a $43 million adjustment to a litigation-related contingency accrual.
Interstate natural gas adjusted EBITDA was approximately $519 million versus $512 million a year earlier, which Long attributed to higher contracted volumes at higher rates on Panhandle Eastern, Trunkline, Florida Gas, and Transwestern. Intrastate natural gas adjusted EBITDA rose to approximately $437 million from $344 million, primarily due to about $100 million tied to Winter Storm Fern.
Project updates: pipelines, storage, processing, and exports
Long and Co-CEO Mackie McCrea provided updates across a slate of pipeline and export initiatives.
On the Desert Southwest Pipeline, Long said Transwestern initiated the FERC pre-filing process in March 2026 and expects to file a formal certificate application in the fourth quarter of 2026. He said the company held 15 open houses along the proposed route and has engaged with more than 500 stakeholders. Long said the pipeline is expected to be in service by the fourth quarter of 2029.
On Transwestern, Long said Energy Transfer approved the Springerville Lateral—an approximately 120-mile, 30-inch pipeline with about 625 million cubic feet per day of capacity—supported by 20-year agreements and targeted for service in the fourth quarter of 2029. Total growth capital is expected to be about $600 million.
Long said Phase 1 of the Hugh Brinson Pipeline remains expected to be in service in the fourth quarter of 2026, with the company potentially able to begin flowing some gas in early third quarter ahead of in-service. Phase 2, consisting of additional compression, is expected in the first quarter of 2027. McCrea said the pipe is fully contracted and that backhaul commitments could provide upside.
For Florida Gas Transmission (FGT), Long said open seasons were completed for two projects supported by long-term agreements:
- Phase IX: about 90 miles of looping plus compression, ~525 MMcf/d capacity, expected in service in the fourth quarter of 2028; Energy Transfer’s share of cost estimated at ~$565 million (depending on final shipper elections).
- South Florida: ~40-mile extension plus compression and a new meter station, ~230 MMcf/d capacity, expected in service in the first quarter of 2030; Energy Transfer’s share of cost estimated at ~$110 million (depending on final shipper elections).
McCrea added that Phase IX had no contingency, while the South Florida project required additional customer elections before reaching final investment decision.
Long also highlighted progress on a new storage cavern at the Bethel Natural Gas Storage Facility that is expected to more than double working gas capacity to over 12 Bcf.
On power generation and data center-related gas demand, Long said the intrastate power team added connections to serve new Oklahoma power plant loads totaling about 300 MMcf/d, with one connection in service, two expected in the third quarter of 2026, and another expected in the fourth quarter of 2028. He also said the company is in advanced negotiations for another 400 MMcf/d of power plant demand in Oklahoma.
Long said Energy Transfer signed agreements to provide long-term firm transportation via its Texas intrastate system for Nexus’ “Nexus Hubbard campus” in Central Texas, a behind-the-meter AI hyperscale campus powered by on-site natural gas generation. Initial volumes are expected to be about 150 MMcf/d, with costs “fully reimbursed,” and the project expected in service by year-end. Long also said the company entered into a letter of intent to provide about 150 MMcf/d of firm service on its EGT pipeline for a new Arkansas data center expected in service in mid-2027.
In the Permian, Long said the 275 MMcf/d Mustang Draw I processing plant is being commissioned and expected to be in full service next month, with the 275 MMcf/d Mustang Draw II plant expected in service in the fourth quarter of 2026. McCrea said the company is focused on bringing its current plants online and suggested it may consider another cryogenic plant later, depending on commitments.
Within NGLs, Long said the Gateway NGL Pipeline debottlenecking project entered service in the first quarter, boosting Delaware Basin liquids deliveries to Mont Belvieu. He also said construction is underway on a new 3 million-barrel ethane storage cavern at Mont Belvieu, expected in service in the second half of 2027, to support the ninth Mont Belvieu fractionator expected in service in the fourth quarter of 2026 and future ethane export expansions.
At Nederland, Long said the company extended “the vast majority” of its ethane export agreements into 2041, adding 10 years to the current contracts, and said the company is hopeful it can pursue incremental ethane expansion in the coming months. McCrea declined to discuss specific rates, but said the company was pleased with the outcomes and indicated the next ethane expansion could be “yes, or larger” than prior projects, depending on demand.
In crude oil, Long said Energy Transfer continues to work with Enbridge on a project to provide capacity for about 250,000 barrels per day of light Canadian crude on DAPL, with an open season underway and an expectation to reach final investment decision by mid-2026. The company also approved an expansion of the Bayou Bridge pipeline to up to about 600,000 barrels per day, supported by a 10-year term extension and volume increase from a customer, expected in service in the first quarter of 2027. In response to a question, executive Adam (identified only by first name on the call) said demand was driven primarily by baseload refinery customer needs and increased demand into St. James, “not so much related to anything from exports.”
Management commentary: global demand, exports, and capital discipline
During the question-and-answer session, McCrea said geopolitical conflict has emphasized “a very clear redirection to the U.S. for all products,” including LNG, NGLs, and oil, and said Energy Transfer is “extremely well-positioned” given its asset footprint. CFO Dylan Bramhall said the company raised guidance based on “line of sight to the continued outperformance,” including volumes, rates, and spreads across segments, and characterized the midpoint of guidance as based on a “conservative price deck.”
On exports, Adam said Energy Transfer has seen increased activity across its docks “on all products” and expects elevated demand to persist, adding that even if markets return to “some sense of normalcy,” the company does not believe flows will revert to pre-conflict levels.
Long reiterated the partnership’s focus on capital discipline, including targeting 3% to 5% annual distribution growth over the long term and maintaining a leverage target of 4.0x to 4.5x EBITDA.
About Energy Transfer NYSE: ET
Energy Transfer NYSE: ET is a Dallas-based midstream energy company that develops and operates infrastructure for the transportation, storage and processing of hydrocarbons. The company's operations focus on moving and storing natural gas, natural gas liquids (NGLs), crude oil and refined products through an integrated network of pipelines, terminals, storage facilities and processing plants. Energy Transfer provides core midstream services such as gathering, compression, fractionation, processing, and bulk transportation to support production and downstream supply chains.
Its asset base spans an extensive network across the United States, connecting producing regions, processing centers, petrochemical hubs and coastal and inland markets.
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