2026 could be a much more active year for the MLP.
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energy Transfer (ET 0.24%) is having a rather disappointing 2025. Units of the master limited partnership (MLP) are down over 15% year-to-date. That’s due in part to a significant slowdown in its earnings growth rate.
However,I think 2026 will be a better year for the midstream giant. Here are two bold predictions of what I see ahead for the MLP in the coming year.
Energy Transfer will make a multi-billion-dollar acquisition in 2026
Energy Transfer has long been a consolidator in the energy midstream sector. Over the past five years, it has bought Enable Midstream ($7 billion in 2021), Spindletop ($325 million in 2022), Lotus Midstream ($1.5 billion in 2023), Crestwood Equity Partners ($7.1 billion in 2023), and WTG Midstream ($3.3 billion in 2024). These deals helped fuel a 10% compound annual growth rate in its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from 2020 to 2024.
Despite being in the strongest financial position in its history, Energy Transfer hasn’t closed a deal since WTG Midstream in July of last year. That’s a big reason why its adjusted EBITDA growth rate will dip below 4% in 2025.
Today’s Change
(-0.24%) $ -0.04
Current Price
$16.32
key Data Points
* Market Cap: $44.38B
* P/E Ratio: 8.17
* Dividend Yield: 9.08%
* Debt/Equity: 0.47
* EPS: $1.99
Energy Transfer’s Lake Charles LNG: A Potential Catalyst for Growth in 2026
Energy Transfer LP (ET) is poised for a potentially transformative 2026, largely driven by the possible sale of its Lake Charles LNG export project and the completion of a significant acquisition. After a slower 2024, analysts predict increased activity for the midstream giant, with the Lake Charles LNG project being a key asset in unlocking future value.This analysis will explore the dynamics surrounding the project, potential buyers, and the broader implications for Energy Transfer’s growth trajectory.
Lake Charles LNG: Overcoming past Hurdles
Energy transfer’s Lake Charles LNG project, located in Louisiana, has undergone a significant evolution. Initially facing challenges in securing long-term contracts and financing, the project has now achieved full commercialization. This milestone is crucial, as it addresses a key concern for potential buyers who where previously hesitant to invest in a project lacking commercial certainty.
The project’s capacity is substantial.The first phase of the project includes one liquefaction train with an export capacity of 2.5 million tonnes per annum (mtpa) of LNG. https://www.energytransfer.com/investors/presentations-and-events/ Further expansion is planned,with potential for additional trains to increase capacity substantially.
The Strategic Buyer Landscape: Lessons from Driftwood LNG
The success of Driftwood LNG, now rebranded as Louisiana LNG, provides a compelling precedent for Energy Transfer.In 2023, Woodside Energy acquired Tellurian, the original developer of Driftwood LNG, for $900 million. https://www.woodside.com/news/woodside-completes-acquisition-of-tellurian Woodside, with its established expertise in LNG development, subsequently brought in equity partners, selling a 40% stake to Stonepeak and a 10% stake, along with an 80% interest in the Driftwood Pipeline, to Williams. https://www.woodside.com/news/woodside-sells-stake-in-louisiana-lng-to-stonepeak
This demonstrates a clear appetite for LNG projects, notably for experienced operators willing to partner with financial investors. The initial reluctance to invest in a project led by Energy Transfer, due to its relative inexperience in the LNG space, appears to have diminished with the project’s full commercialization. This positions Energy Transfer favorably to attract a strategic buyer.
Potential Buyers and Key Considerations
Several companies could be interested in acquiring Lake Charles LNG. Potential candidates include:
* Major International Oil Companies (IOCs): companies like Shell, BP, TotalEnergies, and Equinor are actively expanding their LNG portfolios and could view Lake Charles as a strategic addition.
* National Oil Companies (NOCs): NOCs from countries like Qatar, China, and Japan are increasingly investing in LNG projects to secure long-term energy supplies.
* Experienced LNG Developers: Companies like Woodside Energy, already demonstrating an appetite for US LNG assets, could be interested in further expansion.
* Infrastructure Funds: Funds like Stonepeak, having already invested in Louisiana LNG, may consider Lake Charles as another attractive opportunity.
The valuation of Lake Charles LNG will be a key factor. Analysts estimate the project could be worth between $8 billion and $12 billion, depending on market conditions and the terms of the sale. https://www.reuters.com/markets/deals/energy-transfer-could-fetch-8-12-bln-lake-charles-lng-sale-sources-2024-11-22/
2026: A Pivotal Year for Energy Transfer
2024 was a relatively quiet year for Energy Transfer in terms of major acquisitions,resulting in slower growth compared to previous years. Though, the company’s management anticipates a more active 2026.
The triumphant sale of Lake Charles LNG, coupled with a “needle-moving” acquisition, could significantly boost Energy Transfer’s financial performance and unlock substantial value for unitholders. These moves would provide the MLP with the capital to pursue further growth opportunities and deliver stronger total returns.