Energy Transfer's Q4 2024: Navigating Contradictions in Pipeline Growth, Project Returns, and M&A Strategy

These are the key contradictions discussed in Energy Transfer's latest 2024Q4 earnings call, specifically including: Pipeline Infrastructure Growth and Utilization, Data Center and Natural Gas Infrastructure Project Returns, Project Returns and Growth Opportunities, and M&A Strategy:



Record Financial Performance:
- Energy Transfer reported adjusted EBITDA of $15.5 billion for full year 2024, up 13% over 2023, and DCF attributable to partners of $8.4 billion, up 10% over 2023.
- The record financial performance was driven by increased volumes across interstate, midstream, NGL, and crude segments, as well as strong NGL exports and higher rates in pipelines like Gulf Coast and Mariner East.

Permian Basin Growth:
- The company experienced a 9% increase in legacy Permian throughput and added assets from Crestwood and WTG, contributing to a $705 million adjusted EBITDA in the midstream segment for Q4 2024.
- This growth was fueled by strong producer needs and new processing plant additions, although it was partially offset by decreased volumes in dry gas regions and increased operating expenses from acquisitions.

Data Center and Power Generation Initiatives:
- Energy Transfer entered into a long-term agreement with CloudBurst data centers to supply natural gas for their projects, representing the first commercial arrangement of this kind.
- The company sees significant potential in providing natural gas to data centers and power plants, given its extensive infrastructure and the anticipated rise in demand for natural gas as a power source.

Investment in Growth Projects:
- The company approved the construction of the Mustang Draw processing plant and plans to spend $5 billion in organic growth capital in 2025, focusing on intrastate, NGL and refined products, midstream, and crude oil segments.
- These investments are driven by the need to meet growing demand for NGL exports and the potential expansion of natural gas-driven industries like data centers and coal-to-natural gas conversions.