What Enterprise Products Partners (EPD) Said on Its Q3 Earnings Call

Key Points

• Strong third-quarter performance: Adjusted EBITDA rose 16% year over year to $2.8 billion, while distributable cash flow increased 27% to $2.3 billion. Enterprise reported record system volumes and 1.9 times distribution coverage.
• Higher Permian gas outlook is driving expansion: Enterprise lifted its 2025–2030 Permian wet gas and NGL production growth forecast to 34% from 23%, supporting plans to build roughly two processing plants annually and expand pipeline, fractionation and export capacity.
• Capital returns remain a priority: The partnership raised its quarterly distribution 2.8% to $0.56 per unit, repurchased $112 million of units in the quarter and maintained net leverage within its 2.7–3.25 times target range.

Enterprise Products Partners NYSE: EPD reported third-quarter results marked by higher Permian Basin natural gas and natural gas liquids production, strong export activity and contributions from recently completed projects, while also outlining additional infrastructure plans tied to its updated outlook for Permian gas growth.

The partnership generated adjusted EBITDA of $2.8 billion in the third quarter, up 16% from a year earlier, according to Co-Chief Executive Officer Randy Fowler. Distributable cash flow from operations rose 27% to $2.3 billion, producing 1.9 times distribution coverage and $1.1 billion of retained cash flow for reinvestment.

“These results were primarily driven by increased natural gas and NGL production growth in the Permian,” Fowler said, along with demand for U.S. energy and petrochemical products, increased Haynesville natural gas pipeline volumes, and earnings from assets placed into service during the past year.

Record volumes across the system

Enterprise’s integrated pipeline system transported a record 14.8 million barrels per day equivalent during the quarter, while its marine terminals exported 2.5 million barrels per day of liquid hydrocarbons. Natural gas processing inlet volumes reached a record 8.5 billion cubic feet per day.

In the Permian, plant inlet volumes climbed 12% from the third quarter of 2025 to a record 4.6 billion cubic feet per day. The partnership said its three-year compound annual growth rate for Permian plant inlet volumes was 19%.

Fowler said projects that began operations in the past 12 months included the company’s 11th Delaware Basin gas processing plant, the Bahia NGL pipeline, Frac 14 at Mont Belvieu, and the second phase of the Neches River NGL Export Terminal.

Enterprise expects to complete two major projects in the fourth quarter: a 300,000-barrel-per-day liquefied petroleum gas export expansion at its Houston Ship Channel terminal and a 300 million-cubic-foot-per-day gas processing plant in the Midland Basin. The LPG expansion is fully contracted and is in the early stages of commissioning, Senior Vice President of Hydrocarbon Marketing Tyler Cott said.

The Houston Ship Channel project is expected to bring Enterprise’s total LPG loading capacity there to about 1.1 million barrels per day. The new Midland processing plant, called Athena, will be the partnership’s 20th processing facility in the Permian and is expected to bring total basin processing capacity to nearly 5 billion cubic feet per day.

Higher Permian gas forecast supports expansion plans

Enterprise increased its forecast for Permian wet natural gas and NGL production growth from 2025 through 2030 to 34%, compared with a 23% forecast issued in April. Its forecast for crude oil production growth changed only modestly, by about 100,000 barrels per day by 2030, Fowler said.

Corey Johnson, senior vice president of fundamentals and commodity risk assessment, attributed the revised gas outlook to shallower natural-gas decline curves, higher gas-to-oil ratios and shifts toward areas and formations with greater gas content. He also cited technology changes, including improvements in drilling, completion equipment and chemical use, which the company believes are increasing total recoveries.

Justin Kleiderer, senior vice president of natural gas assets, said the updated growth curve gives Enterprise more confidence that it will build closer to two Permian processing plants annually, versus a previously cited range of one to two plants per year. He added that the partnership has grown Permian volumes faster than the broader basin and expects that trend to continue.

On downstream infrastructure, Senior Vice President of Unregulated NGLs Zach Strait said Enterprise may build additional fractionators after Frac 15, which is scheduled to begin service in 2028. The company cited longer equipment lead times but said it has flexibility across its storage, fractionation and downstream asset network.

Enterprise also expects its Bahia pipeline extension into the Delaware Basin to enter service in the fourth quarter of 2027. A 400,000-barrel-per-day expansion that would increase Bahia capacity to 1 million barrels per day is expected to begin service in the fourth quarter of 2027 and continue through mid-2028, with power availability representing the critical path.

Capital allocation, returns and leverage

Fowler said Enterprise has $6.3 billion of sanctioned organic projects under construction and continues to favor such investments over acquisitions at what it views as top-of-cycle merger-and-acquisition multiples. He said organic projects historically have offered more consistent returns and fewer surprises.

• Enterprise declared a third-quarter distribution of $0.56 per common unit, up 2.8% from the year-earlier quarter. The distribution is scheduled to be paid Nov. 30 to unitholders of record as of Oct. 30.
• The partnership repurchased $112 million of common units in the third quarter and $387 million year to date. Cumulative use of its $5 billion buyback authorization reached 36%.
• For the 12 months ended Sept. 30, Enterprise returned $5.3 billion to investors through $4.8 billion of distributions and $437 million of buybacks, equal to 54% of adjusted cash flow from operations.
• Third-quarter capital investments totaled $1.1 billion, including $900 million for growth projects and $185 million for sustaining capital.

Enterprise expects 2026 growth capital expenditures, net of about $600 million in asset-sale proceeds already received, to range from $2.9 billion to $3.4 billion. It currently expects 2027 growth capital spending to remain around $3 billion, though Fowler said the partnership will provide an update after its annual budget process and review of producer plans. Sustaining capital spending for 2026 is expected to be about $650 million.

As of Sept. 30, Enterprise had $33.7 billion of debt principal outstanding, $4.8 billion of consolidated liquidity and a net leverage ratio of 2.9 times. The company’s leverage target remains between 2.7 times and 3.25 times. Fowler said the balance sheet provides flexibility but that management does not see a need for leverage to move materially below current levels.

Leadership transition

The call marked Jim Teague’s final quarterly earnings call as co-chief executive officer. Teague, who joined Enterprise in 1999, said the company’s enterprise value had grown from less than $2 billion at that time to nearly $120 billion.

Teague credited Enterprise’s growth to its customer-focused culture, teamwork and its efforts over the past two decades to connect major U.S. production basins with Gulf Coast customers and export markets. Fowler will assume the sole CEO role in January.

About Enterprise Products Partners (NYSE:EPD)

Enterprise Products Partners L.P. NYSE: EPD is a North American midstream energy partnership headquartered in Houston, Texas. The company provides infrastructure and services for the transportation, storage, processing and export of energy products, connecting producers with domestic and international markets.

Its operations include pipelines, storage facilities, natural gas processing plants, natural gas liquids (NGL) fractionation facilities, and marine terminals. Enterprise handles NGLs such as ethane, propane, butanes and natural gasoline, as well as crude oil, refined products, petrochemicals and natural gas.

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