Saudi Aramco in talks with Commonwealth LNG for offtake agreement - Reuters
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 09 2025
0mins
Should l Buy ET?
Source: SeekingAlpha
Saudi Aramco's LNG Supply Talks: Saudi Aramco is negotiating with Commonwealth LNG for a supply of 2 million metric tons per year from its proposed Louisiana facility, aiming to enhance its liquefied natural gas market position.
Commonwealth LNG's Progress: If successful, this deal would help Commonwealth LNG reach closer to its target of 8 million tons per year in sales agreements, as it plans to finalize construction decisions for the plant by the end of the year.
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Analyst Views on ET
Wall Street analysts forecast ET stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ET is 20.65 USD with a low forecast of 17.00 USD and a high forecast of 23.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 18.210
Low
17.00
Averages
20.65
High
23.00
Current: 18.210
Low
17.00
Averages
20.65
High
23.00
About ET
Energy Transfer LP owns and operates a diversified portfolios of energy assets in the United States, with more than 140,000 miles of pipeline and associated energy infrastructure. The Company’s strategic network spans 44 states with assets in all of the major United States production basins. Its core operations include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; and NGL fractionation. The Company’s segments include intrastate transportation and storage, interstate transportation and storage, midstream, NGL and refined products transportation and services, crude oil transportation and services, investment in Sunoco LP, investment in USA Compression Partners, LP (USAC), and all other. It also owns Lake Charles LNG Company, LLC, its wholly owned subsidiary, which owns an LNG import terminal and regasification facility.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Analysis of Energy Transfer's Future Growth Potential
- Strong Stock Performance: Energy Transfer's stock has rallied 42% over the past three years, and when including reinvested distributions, the total return reaches 78%, indicating its robust market performance and attractiveness to investors.
- Resilient Business Model: Operating over 140,000 miles of pipelines, the company provides transportation and storage services for natural gas, LNG, and crude oil, with a tolling model that allows it to maintain stable profits despite commodity price volatility, although it faces challenges from tariffs and high interest rates.
- Robust Growth Drivers: Energy Transfer has added over 50,000 miles of pipelines through acquisitions in recent years and plans further acquisitions, while the expansion of its core Permian Basin operations and the completion of the Lake Charles LNG project in Louisiana are expected to drive organic growth.
- Optimistic Profitability Outlook: Analysts project that from 2025 to 2027, the company's adjusted EBITDA and earnings per public unit (EPU) will grow at compound annual growth rates of 6.5% and 11.7%, respectively, indicating strong future profitability and attracting more investors.
See More
Analysis of Energy Transfer's Attractive Distribution Yield
- Stable Cash Flow: Energy Transfer's core North American midstream business ensures stable cash flows by charging fees for energy infrastructure usage, with a distributable cash flow coverage of 1.8x for distributions in the first nine months of 2025, highlighting the reliability of its operations.
- Distribution Growth Plan: The company plans to invest $5 billion in capital expenditures in 2026 to support an annual distribution growth of 3% to 5%, leading to an overall expected return of around 10%, aligning with investor expectations for long-term stock returns.
- Impact of Historical Dividend Cuts: Although the company cut its distribution by 50% in 2020 due to the pandemic to strengthen its balance sheet, the distribution has since recovered to pre-cut levels, which may still weigh on investors relying on income for living expenses.
- Industry Competitive Analysis: While Energy Transfer presents attractive features, other high-yield companies in the midstream sector, such as Enterprise Products Partners and Enbridge, offer longer histories of dividend growth, prompting investors to weigh yield against risk for informed decision-making.
See More
Stable Dividend Choices in Energy Stocks
- ExxonMobil's Dividend Growth: ExxonMobil (XOM) has raised its dividend for 43 consecutive years, supported by a robust balance sheet and a flexible break-even point, with expectations to lower costs to $30 per barrel by 2030, enhancing its competitiveness in the volatile oil and gas sector.
- Stable Capital Returns: In addition to dividend growth, ExxonMobil has returned substantial capital to shareholders through stock buybacks, achieving an 11% return on capital employed over the past five years, outperforming peers by 2%, demonstrating strong financial management.
- Energy Transfer's Gas Demand: Energy Transfer (ET) operates over 140,000 miles of pipeline and is poised to benefit from growing natural gas demand, particularly from data centers and utility companies, as it integrates its network with major hyperscalers.
- Long-Term Contracts Secured: Energy Transfer has secured a deal with Oracle to supply 900 MMcf/d of natural gas and a 20-year agreement with Entergy Louisiana to transport 250 BBtu/d, further solidifying its position in the natural gas market.
See More
Analysis of High-Yield Stocks in the Energy Sector
- Energy Transfer's High Yield: Energy Transfer (ET) boasts a 9.2% dividend yield, having cut its distribution in 2020 due to the pandemic, but it has since recovered and plans a 3% to 5% annual growth, with up to $5.5 billion in investments planned by 2026 to support this growth.
- Enterprise's Stability: Enterprise Products Partners (EPD) has increased its distribution for 27 consecutive years, with a distributable cash flow covering its distribution at a comfortable 1.7x, indicating strong financial health and making it suitable for conservative investors.
- Enbridge's Diversification: Enbridge (ENB) offers a lower yield of 5.35% but has a diversified business model that includes regulated natural gas utilities and clean energy assets, appealing to investors concerned about the global energy transition.
- Investor Choices: Among these three companies, Energy Transfer is suited for aggressive investors, Enterprise Products is ideal for most income-focused investors, while Enbridge provides a diversified option for those worried about the ongoing global energy shift.
See More
Analysis of High-Yield Stocks in Energy Sector
- Energy Transfer Yield: Energy Transfer offers a 7.2% yield and plans for annual distribution growth of 3% to 5% by 2026; despite cutting its distribution in half during the pandemic in 2020, it has since recovered and surpassed pre-cut levels, indicating improved financial health and future growth potential.
- Enterprise Products Stability: Enterprise Products has increased its distribution for 27 consecutive years, currently yielding 6.2%, with a distributable cash flow covering its distribution by 1.7 times, showcasing financial robustness that appeals to conservative investors, with future growth expected to align with Energy Transfer.
- Enbridge Diversification: Enbridge offers a 5.6% yield and operates beyond the midstream sector, including regulated natural gas utilities and clean energy assets, positioning itself to adapt to changing global energy demands, making it suitable for investors focused on clean energy.
- Investment Recommendations: While Energy Transfer's high yield is attractive, its past distribution cut makes it suitable for aggressive investors; Enterprise Products is ideal for most income investors due to its stability, while Enbridge appeals to those concerned about the global energy transition due to its diversified business model.
See More
Energy Transfer Seen as Key to Financial Freedom
- Passive Income Target: According to The Motley Fool, the average retiree under 65 needs about $84,000 annually in passive income to cover expenses and achieve financial freedom.
- Investment Yield Comparison: Energy Transfer (ET) currently offers a 7.5% yield, significantly higher than the S&P 500's 1.2%, making it an attractive option for investors seeking income.
- Investment Requirement Analysis: To generate $84,000 in passive income from Energy Transfer, investors would need to own 62,687 units, translating to an investment of approximately $1.1 million at the current unit price of $18.
- Financial Stability: Energy Transfer is in its strongest financial position ever, with about 90% of its cash flow derived from long-term contracts and government-regulated rates, and it expects to increase its distribution by 3% to 5% annually.
See More
Analysis of Energy Transfer's Future Growth Potential
- Strong Stock Performance: Energy Transfer's stock has rallied 42% over the past three years, and when including reinvested distributions, the total return reaches 78%, indicating its robust market performance and attractiveness to investors.
- Resilient Business Model: Operating over 140,000 miles of pipelines, the company provides transportation and storage services for natural gas, LNG, and crude oil, with a tolling model that allows it to maintain stable profits despite commodity price volatility, although it faces challenges from tariffs and high interest rates.
- Robust Growth Drivers: Energy Transfer has added over 50,000 miles of pipelines through acquisitions in recent years and plans further acquisitions, while the expansion of its core Permian Basin operations and the completion of the Lake Charles LNG project in Louisiana are expected to drive organic growth.
- Optimistic Profitability Outlook: Analysts project that from 2025 to 2027, the company's adjusted EBITDA and earnings per public unit (EPU) will grow at compound annual growth rates of 6.5% and 11.7%, respectively, indicating strong future profitability and attracting more investors.
See More
Analysis of Energy Transfer's Attractive Distribution Yield
- Stable Cash Flow: Energy Transfer's core North American midstream business ensures stable cash flows by charging fees for energy infrastructure usage, with a distributable cash flow coverage of 1.8x for distributions in the first nine months of 2025, highlighting the reliability of its operations.
- Distribution Growth Plan: The company plans to invest $5 billion in capital expenditures in 2026 to support an annual distribution growth of 3% to 5%, leading to an overall expected return of around 10%, aligning with investor expectations for long-term stock returns.
- Impact of Historical Dividend Cuts: Although the company cut its distribution by 50% in 2020 due to the pandemic to strengthen its balance sheet, the distribution has since recovered to pre-cut levels, which may still weigh on investors relying on income for living expenses.
- Industry Competitive Analysis: While Energy Transfer presents attractive features, other high-yield companies in the midstream sector, such as Enterprise Products Partners and Enbridge, offer longer histories of dividend growth, prompting investors to weigh yield against risk for informed decision-making.
See More
Stable Dividend Choices in Energy Stocks
- ExxonMobil's Dividend Growth: ExxonMobil (XOM) has raised its dividend for 43 consecutive years, supported by a robust balance sheet and a flexible break-even point, with expectations to lower costs to $30 per barrel by 2030, enhancing its competitiveness in the volatile oil and gas sector.
- Stable Capital Returns: In addition to dividend growth, ExxonMobil has returned substantial capital to shareholders through stock buybacks, achieving an 11% return on capital employed over the past five years, outperforming peers by 2%, demonstrating strong financial management.
- Energy Transfer's Gas Demand: Energy Transfer (ET) operates over 140,000 miles of pipeline and is poised to benefit from growing natural gas demand, particularly from data centers and utility companies, as it integrates its network with major hyperscalers.
- Long-Term Contracts Secured: Energy Transfer has secured a deal with Oracle to supply 900 MMcf/d of natural gas and a 20-year agreement with Entergy Louisiana to transport 250 BBtu/d, further solidifying its position in the natural gas market.
See More
Analysis of High-Yield Stocks in the Energy Sector
- Energy Transfer's High Yield: Energy Transfer (ET) boasts a 9.2% dividend yield, having cut its distribution in 2020 due to the pandemic, but it has since recovered and plans a 3% to 5% annual growth, with up to $5.5 billion in investments planned by 2026 to support this growth.
- Enterprise's Stability: Enterprise Products Partners (EPD) has increased its distribution for 27 consecutive years, with a distributable cash flow covering its distribution at a comfortable 1.7x, indicating strong financial health and making it suitable for conservative investors.
- Enbridge's Diversification: Enbridge (ENB) offers a lower yield of 5.35% but has a diversified business model that includes regulated natural gas utilities and clean energy assets, appealing to investors concerned about the global energy transition.
- Investor Choices: Among these three companies, Energy Transfer is suited for aggressive investors, Enterprise Products is ideal for most income-focused investors, while Enbridge provides a diversified option for those worried about the ongoing global energy shift.
See More
Analysis of High-Yield Stocks in Energy Sector
- Energy Transfer Yield: Energy Transfer offers a 7.2% yield and plans for annual distribution growth of 3% to 5% by 2026; despite cutting its distribution in half during the pandemic in 2020, it has since recovered and surpassed pre-cut levels, indicating improved financial health and future growth potential.
- Enterprise Products Stability: Enterprise Products has increased its distribution for 27 consecutive years, currently yielding 6.2%, with a distributable cash flow covering its distribution by 1.7 times, showcasing financial robustness that appeals to conservative investors, with future growth expected to align with Energy Transfer.
- Enbridge Diversification: Enbridge offers a 5.6% yield and operates beyond the midstream sector, including regulated natural gas utilities and clean energy assets, positioning itself to adapt to changing global energy demands, making it suitable for investors focused on clean energy.
- Investment Recommendations: While Energy Transfer's high yield is attractive, its past distribution cut makes it suitable for aggressive investors; Enterprise Products is ideal for most income investors due to its stability, while Enbridge appeals to those concerned about the global energy transition due to its diversified business model.
See More
Energy Transfer Seen as Key to Financial Freedom
- Passive Income Target: According to The Motley Fool, the average retiree under 65 needs about $84,000 annually in passive income to cover expenses and achieve financial freedom.
- Investment Yield Comparison: Energy Transfer (ET) currently offers a 7.5% yield, significantly higher than the S&P 500's 1.2%, making it an attractive option for investors seeking income.
- Investment Requirement Analysis: To generate $84,000 in passive income from Energy Transfer, investors would need to own 62,687 units, translating to an investment of approximately $1.1 million at the current unit price of $18.
- Financial Stability: Energy Transfer is in its strongest financial position ever, with about 90% of its cash flow derived from long-term contracts and government-regulated rates, and it expects to increase its distribution by 3% to 5% annually.
See More
