Q2 2026 Energy Transfer LP Earnings Call Transcript
Key Points
- Record volumes across midstream gathering, NGL transportation, NGL exports, and crude oil transportation drove strong Q2 2026 results.
- Adjusted EBITDA guidance for 2026 raised to $18.8-$19.1 billion, up ~$0.5 billion at the midpoint from prior guidance.
- Hugh Brinson Pipeline phase I is ahead of schedule and under budget, with full capacity expected by September 1, 2026, and phase II in Q1 2027.
- Strong demand for natural gas from data centers and power plants, with new contracts and expansions in Texas, Oklahoma, and other states.
- Ethane export expansion at Nederland Terminal is fully contracted under long-term agreements, with 80% of volumes destined for markets outside China.
- Permian processing expansions (Mustang Draw I and II) are ramping up, with record volumes and improved plant utilization.
- NGL recontracting secured 300,000 barrels per day of Y-grade volumes into the 2030s, with expectations of higher rates going forward.
- Desert Southwest Pipeline project progressing well, with positive stakeholder engagement and expectations to be on time for late 2029 service.
- Strong performance across all segments, with NGL, Midstream, Intrastate, and Crude all beating expectations in Q2.
- Capital discipline maintained with leverage targets of 4-4.5x EBITDA and distribution growth of 3-5% annually.
- Market volatility and wider spreads contributed to Q2 upside, but these benefits are not expected to persist in the back half of 2026.
- Hugh Brinson Pipeline phase I is not yet at full capacity, with full phase I capacity expected only by September 1, 2026.
- Mustang Draw II and Frac IX are expected to have limited impact on 2026 results due to late-year in-service dates.
- Green Chile project faces regulatory challenges in New Mexico, potentially delaying service.
- MLO2 project faces regulatory complexity in Canada, with uncertainty around timing and final approval.
- Crude oil segment results included a $60 million benefit in Q1 that was offset by hedge losses in Q2, indicating potential volatility in earnings.
- NGL refined products inventory hedges include $27 million expected to be offset in Q4 2026.
- Permian NGL takeaway pipelines are approximately 95% utilized, leaving limited spare capacity for additional growth.
- Recontracting rates for NGL assets have been at market rates, with some downward pressure from new capacity, though expected to bottom out.
- Data center demand growth may face delays due to permitting and grid interconnection issues, though ET's behind-the-meter projects mitigate this.
Good day, and welcome to Energy Transfer's Q2 2026 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference host by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I'd now like to turn the conference over to Tom Long, CEO. Please go ahead.
Thank you, operator, and good morning everyone, and welcome to the Energy Transfer second quarter 2026 earnings call. I'm also joined today by Mackie McCrea, Dylan Bramhall, and other members of the senior management team who are here to help answer your questions after our prepared remarks. Hopefully you saw the press release we issued earlier this morning. As a reminder, our earnings release contains an update to guidance and a thorough MD
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