Energy Transfer Delivered Record-Smashing Results in 2024 and Has Plenty of Fuel for a Strong 2025

Energy Transfer (NYSE: ET) recently closed the books on 2024 by reporting its fourth-quarter and full-year results. The master limited partnership (MLP) set several records.

That strong momentum should continue in 2025. Here's a look at the MLP's record year and what's ahead in 2025.

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Breaking records across the board

Energy Transfer generated $15.5 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) last year, a 13% increase from 2023's total. That hit the high end of its $15.3 billion to $15.5 billion guidance range and set a new partnership record.

Fueling the company's record-breaking earnings were record-setting volumes across several product categories:

• Crude oil transportation volumes: Up 25%
• NGL fractionation volumes: Up 9%
• NGL transportation volumes: Up 7%
• Total NGL exports: Up 4%
• Midstream gathered volumes: Up 2%
• Interstate natural gas transported: Up 2%

The MLP benefited from acquisitions, recently completed organic expansion projects, and strong market conditions. It has closed three major acquisitions over the past several quarters: Lotus Midstream (May 2023), Crestwood Equity Partners (November 2023), and WTG Midstream (July 2024). It also formed a joint venture with its affiliated MLP Sunoco LP to combine their crude oil and produced water gathering assets in the Permian Basin.

On top of that, the company completed several expansion projects, including its Orla East and Grey Wolf gas processing plants and a 30-mile crude oil pipeline to increase the flow of oil to a major storage hub. These growth-related investments helped fuel record volumes, contributing to its earnings surge.

Energy Transfer produced strong cash flows last year. Its distributable cash flow totaled nearly $8.4 billion. That easily covered its growing distribution (almost $4.4 billion, up 3.2% on a per-unit basis). It used the excess cash to fund expansion projects ($3 billion) and strengthen its balance sheet following its recent acquisition binge.

Lots of momentum heading into 2025

Energy Transfer expects to continue growing its earnings this year. It's currently forecasting that its adjusted EBITDA will be in the range of $16.1 billion to $16.5 billion for 2025, a 5% increase from last year at the midpoint. Fueling that growth will be the highly accretive WTG Midstream acquisition and the continued impact of organic expansion projects.

The MLP recently completed construction on the first of eight planned 10-megawatt natural gas power generation facilities. It expects to complete the remaining seven plants by the end of next year. Energy Transfer also expects to complete its Badger processing plant (midyear), Red Lake IV processing plant (third quarter), and Nederland Flexport NGL expansion projects (midyear and fourth quarter) this year. These projects will start contributing incremental earnings and cash flow this year and into 2026.

The midstream giant plans to invest $5 billion into these and other growth capital projects this year. That's a $2 billion increase from its 2024 investment level, fueled by several recently approved projects. The biggest is the $2.7 billion Hugh Brinson Pipeline, which should enter service by the end of next year. Energy Transfer also recently approved building the ninth NGL fractionator at its Mont Belvieu complex.

Meanwhile, it has several additional projects under development. It recently agreed to supply natural gas to CloudBurst's flagship AI data center in Texas, pending a Final Investment Decision (FID) by that company's customer. And Energy Transfer is progressing toward making an FID on its Lake Charles LNG export project. It took a notable step toward securing that project by signing a long-term agreement with Chevron to export gas from that facility.

The company is also developing an offshore oil port, carbon capture and sequestration solutions, and blue ammonia hubs. Securing these and other projects would enhance and extend the MLP's long-term growth outlook.

Plenty of fuel to continue its record-setting run

Energy Transfer's acquisition spree over the past two years helped fuel last year's record-setting results. It has lots of momentum to continue growing its volumes and earnings in 2025 and beyond, thanks to its large backlog of expansion opportunities. Because of that, the MLP should be able to continue growing its high-yielding distribution (currently 6.7%) for the next several years. That makes it an enticing option for those seeking a lucrative and steadily rising income stream (and are comfortable receiving the Schedule K-1 federal tax forms the MLP sends its investors each year).

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Matt DiLallo has positions in Chevron and Energy Transfer. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.