Energy Transfer Reports Strong Q2 of 2022 Results

Source: www.gulfoilandgas.com 8/3/2022, Location: North America

Energy Transfer LP (ET) (“Energy Transfer” or the “Partnership”) reported financial results for the quarter ended June 30, 2022.

Energy Transfer reported net income attributable to partners for the three months ended June 30, 2022 of $1.33 billion, a $700 million increase from the same period last year. For the three months ended June 30, 2022, net income per limited partner unit (basic) was $0.40 per unit.

Adjusted EBITDA for the three months ended June 30, 2022 was $3.23 billion compared to $2.62 billion for the three months ended June 30, 2021.

Distributable Cash Flow attributable to partners, as adjusted, for the three months ended June 30, 2022 was $1.88 billion compared to $1.39 billion for the three months ended June 30, 2021.

For the second quarter 2022, Energy Transfer had higher transportation volumes across all of its segments and a full quarter contribution from the Enable Midstream assets that were acquired in December 2021.

Key accomplishments and recent developments:

Operational

- As a result of increasing demand for fractionation capacity, Energy Transfer recently resumed construction of its eighth fractionator at its Mont Belvieu, Texas facility. Frac VIII, which was more than half funded when construction was paused in 2020, is now expected to be in service in the third quarter of 2023 and will bring the Partnership’s total fractionation capacity at Mont Belvieu to over 1.1 million barrels per day.
- During the second quarter of 2022, Energy Transfer achieved record processing volumes in the Permian Basin. In support of this increased activity, the Partnership is currently constructing two new cryogenic processing plants:
- The Grey Wolf and Bear plants will each have a design capacity of 200 MMcf per day and are expected to be in service by year-end 2022 and in the second quarter of 2023, respectively.
- During the second quarter of 2022, Energy Transfer also reported record NGL transportation and fractionation volumes.
- Energy Transfer recently completed a non-binding open season on its Gulf Run Pipeline Project. Customer discussions are ongoing, which will likely necessitate facilities beyond the initial design of 1.65 Bcf/d. The 42-inch pipeline is expected to be completed by year-end 2022 and will provide natural gas transmission between the prolific Haynesville Shale and the U.S. Gulf Coast.
- Energy Transfer’s Houston Terminal increased export crude oil volumes in the second quarter as a result of improved supply access via the new Ted Collins Link. This pipeline connection increases access to oil volumes from Energy Transfer’s Nederland Terminal and is expected to support future export volume growth.

Strategic

- In August 2022, Energy Transfer entered into an agreement to acquire Woodford Express, LLC, a Mid-Continent gas gathering and processing system, for approximately $485 million. The system, which is located in the heart of the SCOOP play, has 450 MMcf per day of cryogenic gas processing and treating capacity and over 200 miles of gathering and transportation lines, which are connected to Energy Transfer’s pipeline network. The system is supported by dedicated acreage with long-term, predominantly fixed-fee contracts with active, proven producers. The transaction is expected to close by the end of the third quarter, subject to regulatory review and other customary closing conditions, and to be immediately accretive to Distributable Cash Flow.
- To date in 2022, the Partnership has entered into five long-term LNG Sale and Purchase Agreements (“SPAs”). Under these SPAs, Energy Transfer LNG Export, LLC is expected to supply a total of 5.8 million tonnes of LNG per annum, with first deliveries expected to commence as early as 2026 under SPA terms ranging from 18 to 25 years.
- Energy Transfer’s Nederland terminal and related facilities serve as critical resources with access to the nation’s Strategic Petroleum Reserve (“SPR”). As a result of increased activity in the region along with higher SPR volumes, the terminal set records for throughput during the second quarter.

Financial

- Given Energy Transfer’s strong performance in the second quarter of 2022, as well as continued increasing demand, the Partnership now expects Adjusted EBITDA for the full year 2022 to be between $12.6 billion and $12.8 billion (previously $12.2 billion to $12.6 billion). The Partnership continues to expect its 2022 growth capital expenditures to be between $1.8 billion and $2.1 billion.
- In July 2022, Energy Transfer announced a quarterly cash distribution of $0.23 per common unit ($0.92 annualized) for the quarter ended June 30, 2022. This distribution represents a more than 50% increase over the second quarter of 2021. Future increases to the distribution level will continue to be evaluated quarterly with the ultimate goal of returning distributions to the previous level of $0.305 per common unit per quarter ($1.22 annualized) while balancing the Partnership’s leverage target, growth opportunities and unit buybacks.
- As of June 30, 2022, the Partnership’s revolving credit facility had $2.44 billion of available capacity.
- For the three months ended June 30, 2022, the Partnership invested approximately $437 million on growth capital expenditures.

Energy Transfer benefits from a portfolio of assets with exceptional product and geographic diversity. The Partnership’s multiple segments generate high-quality, balanced earnings with no single segment contributing more than 30% of the Partnership’s consolidated Adjusted EBITDA for the three or six months ended June 30, 2022. The vast majority of the Partnership’s segment margins are fee-based and therefore have limited commodity price sensitivity.

Conference Call information:

The Partnership has scheduled a conference call for 3:30 p.m. Central Time/4:30 p.m. Eastern Time on Wednesday, August 3, 2022 to discuss its second quarter 2022 results and provide an update on the Partnership. The conference call will be broadcast live via an internet webcast, which can be accessed through www.energytransfer.com and will also be available for replay on the Partnership’s website for a limited time.


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