Energy Transfer Set to Ramp Up Growth Through 2026

What’s Changing This Year

Energy Transfer (NYSE: ET) is positioning for significantly stronger performance in 2026 after a challenging 2025 that saw its unit price decline by more than 15%. The midstream master limited partnership, which currently yields 8.1%, plans to accelerate its business momentum through a combination of new project completions and expanded capital deployment.

The slowdown last year resulted from several headwinds: compressed commodity prices, delayed organic expansion initiatives, and minimal acquisition activity since mid-2024. But management believes these temporary obstacles are behind them, and the year ahead offers meaningful tailwinds.

The Growth Story Takes Shape

Projected Earnings Expansion

Energy Transfer’s 2026 adjusted EBITDA guidance ranges from $17.3 billion to $17.7 billion, representing growth of 7.5% to 9.9% compared to 2025 expectations. This marks a notable rebound from the less-than-4% growth recorded last year and aligns more closely with the company’s 10% compound annual growth rate delivered between 2020 and 2024.

Projects Coming Online

Several operational catalysts will drive this reacceleration. The company expects new expansion projects to become operational or increase throughput substantially, including the Nederland Flexport NGL expansion, Mustang Draw processing facilities, the Hugh Brinson pipeline’s initial phase, and natural gas infrastructure designed to serve data center operators throughout Texas. These additions, measured in multiple dimensions including capacity in thousands of cubic feet per day, should materially contribute to revenue and cash flow generation.

Beyond organic growth, Energy Transfer benefits indirectly from its affiliated partnerships. Sunoco LP completed its $9.1 billion Parkland acquisition in November, while USA Compression Partners agreed to purchase J-W Power Company for $860 million with closing expected in early 2026. The parent company recognizes portions of these affiliates’ expanded earnings within its consolidated results.

Capital Deployment Accelerates

Management has outlined initial 2026 growth capital spending guidance of $5 billion to $5.5 billion, an increase from the $4.6 billion deployed in 2025 (against a $5 billion initial plan). This elevated investment rate funds both project completions scheduled for this year and construction on longer-duration initiatives.

The Desert Southwest Pipeline represents the most significant multi-year undertaking. Energy Transfer recently upsized this project from its original 42-inch specification to 48-inch diameter, enhancing daily capacity to 2.3 billion cubic feet of natural gas. The expanded project, now budgeted at $5.6 billion, should reach completion in the fourth quarter of 2029. The company signaled potential approval of additional growth initiatives as well.

Distribution Prospects Remain Attractive

With more than half of annual cash flow currently directed to unit holders, Energy Transfer targets distribution growth of 3% to 5% per year. The combination of accelerating earnings, elevated capital spending, and ongoing distribution expansion creates a foundation for improved investor returns, particularly given valuations following last year’s price correction.

Management confidence in this trajectory suggests Energy Transfer is well-positioned to navigate 2026, with infrastructure assets strategically aligned to capitalize on rising demand from power generation and data center development.