Energy Transfer Shifts Focus to Natural Gas, Pauses LNG Project

Energy Transfer (NYSE: ET) is strategically pivoting towards natural gas infrastructure, suspending development of its Lake Charles LNG export project to prioritize investments in pipeline capacity, including significant deliveries to data centers operated by Oracle. This move comes as the company reported mixed fourth-quarter 2025 earnings and raised its 2026 adjusted EBITDA guidance.

Q4 2025 Performance and Strategic Realignment

Energy Transfer’s fourth-quarter 2025 revenue reached $25.32 billion, though net income declined to $928 million from $1.08 billion year-over-year. The company reported earnings per share (EPS) of $0.25 and adjusted EBITDA of $4.18 billion, an 8% increase compared to the prior-year quarter. Despite the net income decrease, Energy Transfer demonstrated operational strength across its network.

Crude oil transportation volumes increased by 6%, NGL fractionation rose by 3%, and NGL exports jumped 12%. Terminal volumes surged 12%, highlighting robust throughput across the company’s 140,000-mile pipeline network spanning 44 states. The company increased its quarterly distribution to $0.3350 per unit, a 3% increase over Q4 2024, resulting in an annualized payout of $1.34, supported by strong cash generation.

Prioritizing Natural Gas Infrastructure

The decision to suspend the Lake Charles LNG project reflects a strategic shift towards natural gas infrastructure. Energy Transfer has already begun delivering 900 MMcf/d of natural gas to Oracle data centers, capitalizing on the growing energy demand driven by artificial intelligence. The company has also expanded its Desert Southwest pipeline project to a capacity of 2.3 Bcf/d, representing a $5.6 billion investment.

Financial Outlook and Capital Expenditure

Energy Transfer raised its 2026 adjusted EBITDA guidance to a range of $17.45 billion to $17.85 billion, up from a previous range of $17.3 billion to $17.7 billion. This increase is partially attributed to the J-W Power acquisition by USA Compression. Growth capital expenditures are projected to be between $5.0 billion and $5.5 billion, with a strong focus on expanding the natural gas network.

Market Performance

As of February 17, 2026, Energy Transfer shares had gained 11.8% year-to-date, outperforming the broader midstream MLP sector, which saw an 11.3% YTD gain as measured by the Alerian MLP ETF.

Suspension of Lake Charles LNG

Energy Transfer initially announced the suspension of the Lake Charles LNG project in December 2025, citing a desire to allocate capital to projects with superior risk/return profiles [1, 4]. The company remains open to discussions with third parties interested in developing the project [4].