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Can ET's Growing NGL Export Infrastructure Place it for Global Growth?
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Key Takeaways
ET is expanding its NGL export capacity via key terminals in Nederland and Marcus Hook.
Long-term, fee-based contracts help ET capture higher-margin international NGL volumes.
ET has 1.1 million barrels per day of NGLs and 1.9 million barrels per day of crude oil export capacity.
Energy Transfer LP (ET - Free Report) stands to benefit significantly from rising global demand for U.S. natural gas liquids (“NGL”) through the strategic expansion of its export infrastructure. The company’s key terminals, Nederland on the Gulf Coast and Marcus Hook on the East Coast, are vital hubs for exporting ethane, propane and butane, essential feedstocks for international petrochemical and industrial markets.
Energy Transfer currently has significant export capacity, able to ship more than 1.1 million barrels per day of NGLs and 1.9 million barrels per day of crude oil. Ongoing expansions will further solidify ET’s role as a critical link in the global energy supply chain. Energy Transfer currently has nearly a 20% share of the global NGL export market.
The expansion of NGL export capabilities enables Energy Transfer to capture higher-margin international volumes, which are generally more lucrative than domestic sales. The firm benefits from long-term, fee-based contracts with global customers, offering stable and predictable cash flows amid volatile commodity price cycles.
The firm’s integrated pipeline and storage network ensures seamless supply-chain connectivity from production basins like the Permian to shipping terminals, reinforcing its competitive moat. By increasing throughput across existing infrastructure, the firm can scale up volumes without proportionally increasing fixed costs, thus enhancing margins.
As demand for NGL is rising globally, with regulatory tailwinds supporting energy exports and its ability to monetize volumes through value-added logistics and terminal services, Energy Transfer is poised to deliver sustainable cash flow growth and robust returns to unitholders.
How Other MLPs Are Benefiting From Rising NGL Demand
Several Master Limited Partnerships are capitalizing on global demand for NGLs, which includes Enterprise Products Partners LP (EPD - Free Report) and Plains All American Pipeline LP (PAA - Free Report) among others.
Enterprise Products Partners has strong NGL export footprints on the Gulf Coast and is expanding capacity at its Houston Ship Channel terminal. The company has long-term ethane contracts in Asia and aims to export more than 100 million barrels per month by 2027.
Plains All American Pipeline has a presence in the NGL value chain. The firm transports NGL to major hubs and export terminals, enabling it to tap into growing international demand.
ET’s Earnings Estimates Moving Up
The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings per unit indicates an increase of 2.13% and 4.26%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
ET’s Units Are Trading at a Discount
Energy Transfer units are somewhat inexpensive relative to the industry. ET’s current trailing 12-month Enterprise Value/Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) is 10.24X compared with the industry average of 11.48X. This indicates that the firm is presently undervalued compared with its industry.
Image: Bigstock
Can ET's Growing NGL Export Infrastructure Place it for Global Growth?
Key Takeaways
Energy Transfer LP (ET - Free Report) stands to benefit significantly from rising global demand for U.S. natural gas liquids (“NGL”) through the strategic expansion of its export infrastructure. The company’s key terminals, Nederland on the Gulf Coast and Marcus Hook on the East Coast, are vital hubs for exporting ethane, propane and butane, essential feedstocks for international petrochemical and industrial markets.
Energy Transfer currently has significant export capacity, able to ship more than 1.1 million barrels per day of NGLs and 1.9 million barrels per day of crude oil. Ongoing expansions will further solidify ET’s role as a critical link in the global energy supply chain. Energy Transfer currently has nearly a 20% share of the global NGL export market.
The expansion of NGL export capabilities enables Energy Transfer to capture higher-margin international volumes, which are generally more lucrative than domestic sales. The firm benefits from long-term, fee-based contracts with global customers, offering stable and predictable cash flows amid volatile commodity price cycles.
The firm’s integrated pipeline and storage network ensures seamless supply-chain connectivity from production basins like the Permian to shipping terminals, reinforcing its competitive moat. By increasing throughput across existing infrastructure, the firm can scale up volumes without proportionally increasing fixed costs, thus enhancing margins.
As demand for NGL is rising globally, with regulatory tailwinds supporting energy exports and its ability to monetize volumes through value-added logistics and terminal services, Energy Transfer is poised to deliver sustainable cash flow growth and robust returns to unitholders.
How Other MLPs Are Benefiting From Rising NGL Demand
Several Master Limited Partnerships are capitalizing on global demand for NGLs, which includes Enterprise Products Partners LP (EPD - Free Report) and Plains All American Pipeline LP (PAA - Free Report) among others.
Enterprise Products Partners has strong NGL export footprints on the Gulf Coast and is expanding capacity at its Houston Ship Channel terminal. The company has long-term ethane contracts in Asia and aims to export more than 100 million barrels per month by 2027.
Plains All American Pipeline has a presence in the NGL value chain. The firm transports NGL to major hubs and export terminals, enabling it to tap into growing international demand.
ET’s Earnings Estimates Moving Up
The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings per unit indicates an increase of 2.13% and 4.26%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
ET’s Units Are Trading at a Discount
Energy Transfer units are somewhat inexpensive relative to the industry. ET’s current trailing 12-month Enterprise Value/Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) is 10.24X compared with the industry average of 11.48X. This indicates that the firm is presently undervalued compared with its industry.
Image Source: Zacks Investment Research
ET’s Price Performance
Units of Energy Transfer have risen 13.8% in the past year compared with the Zacks Oil and Gas - Production Pipeline - MLB industry’s growth of 9.2%.
Image Source: Zacks Investment Research
ET’s Zacks Rank
Energy Transfer currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here