Energy Transfer Reports Lower Q2 Earnings, Weighed by Natural Gas Prices

(Reuters) — U.S. midstream company Energy Transfer on Wednesday reported lower earnings for the second quarter despite higher transport volumes in most energy product segments versus a year ago.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the second quarter was $3.12 billion, compared with $3.23 billion for the same time last year. Distributable cash flow was $1.55 billion, versus $1.88 billion last year.

Lower natural gas and natural gas liquids (NGL) prices affected results, the company said.

Energy Transfer expects full-year 2023 adjusted EBITDA to range between $13.1 billion and $13.4 billion, which is slightly tighter than the previous range of $13.05 billion to $13.45 billion. The guidance's midpoint remains unchanged.

Growth capital expenditures in the second quarter of 2023 were $387 million, while maintenance capital expenditures were $216 million, the company said. Energy Transfer expects its long-term annual growth capital run rate to be about $2 billion to $3 billion, company executives said during a conference call Wednesday to discuss the results.

NGL fractionation volumes rose 5%, while NGL transportation volumes gained 13%, both records for the company.

Midstream gathered volumes rose 8%, while intrastate natural gas transportation volumes rose 3%, both records.

Crude transportation and terminal volumes rose 23% and 15%, respectively.

Total NGL exports out of both the company's Nederland and Marcus Hook terminals reached a record in the second quarter, the company said.

Last quarter, Energy Transfer reached a final investment decision on an expansion to NGL export capacity at Nederland, Texas, which it expects to cost about $1.25 billion and add up to 250,000 barrels per day of export capacity, company executives said on the earnings conference call. It expects the expansion to be in service in mid-2025.

Energy Transfer also expects its Frac 8 project at its Mont Belvieu fractionation and liquids storage facility to be put into service around September, executives said.

The company said it expects to file in August an application for new export authorization for the company's Lake Charles LNG facility project. Executives have decided to do this after the U.S. Department of Energy denied a request from the company to extend a deadline to complete construction on the project.

Energy Transfer is continuing to integrate operations after it completed its acquisition of Lotus Midstream Operations in May.

In June, the 200 million cubic feet per day (MMcf/d) Bear cryogenic processing plant, which is located in the Delaware Basin, was placed into service, the company said.

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