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Energy Transfer ($ET) Surges 27% on Trump LNG Policy + AI Demand Boom After $47M Insider Buying Spree

06/17/2025 22:04

Energy Transfer LP ($ET) is a $57.2 billion market cap energy infrastructure giant operating pipeline networks that transport natural gas, crude oil, and refined products across the United States. Headquartered in Dallas, Texas, the company owns approximately 125,000 miles of pipelines and plays a crucial role in transporting energy resources from key production areas like the Permian Basin and Haynesville Shale. Investors need to pay attention right now because two powerful growth drivers are simultaneously working in Energy Transfer's favor: Trump's restoration of LNG export permits and the AI-driven surge in data center demand. This isn't just a policy shift—it's a structural tailwind for Energy Transfer's business model. Insider trading patterns support this optimistic outlook. On August 12, 2024, director Kelcy Warren purchased 3 million shares at an average price of $15.68, investing a total of $47.04 million. On the same day, Co-CEO Thomas Long and officer Gregory McIlwain each bought 20,000 shares. This demonstrated strong management confidence when the stock was relatively undervalued. Indeed, shares have since risen approximately 27% from $14.27 in June 2024 to $18.15 in June 2025. The most significant catalyst is President Trump's restoration of LNG export permits. On January 21, 2025, the Biden administration's freeze on LNG export permits was lifted, giving Energy Transfer's Lake Charles LNG project in Louisiana significant momentum. This project will have an annual production capacity of 16.5 million tons of LNG, and the company has already secured a 20-year agreement with Chevron to supply 2 million tons annually. Management plans to make a final investment decision by Q4 2025. Even more noteworthy is the explosive growth in natural gas demand from AI and data centers. Energy Transfer has received requests for new natural gas connections from over 90 power plants and data centers, totaling 16 billion cubic feet per day. This represents unprecedented demand in the company's history. With AI technology development expected to increase data center power demand from 3% of total U.S. electricity consumption in 2022 to 8% by 2030, this demand is both sustained and structural in nature. The company's financial performance supports this optimism. Third-quarter 2024 net income reached $1.18 billion, significantly improved year-over-year, with crude oil transportation volumes up 49% and other key business metrics showing strength. The company also raised its quarterly distribution to $0.32, maintaining shareholder-friendly policies. However, investors should carefully monitor risk factors. The most important is the restriction on ethane exports to China. Since late May 2025, the U.S. Commerce Department has required licenses for ethane exports to China, impacting Energy Transfer and other U.S. ethane exporters. Since China represented about half of U.S. ethane exports, these restrictions could negatively affect company profitability in the near term. Natural gas price volatility is another consideration. At the Waha hub in Texas, natural gas prices have dropped into negative territory due to pipeline constraints, showing extreme volatility. While this burdens producers, it creates opportunities for pipeline operators like Energy Transfer through additional infrastructure investment demand. Looking at future investment scenarios, the most optimistic case involves rapid LNG export permit approvals and data center demand surging as expected. This would significantly increase the value of the company's pipeline network and secure stable long-term cash flows. Successful completion of the Lake Charles LNG project could generate billions in additional annual revenue. In the base case scenario, current growth momentum continues with gradual stock price appreciation. Projects like the Hugh Brinson pipeline, scheduled for completion by end-2026, will provide transportation capacity expansion benefits. The risk scenario involves escalating trade conflicts with China or prolonged low natural gas prices. Regulatory changes or environmental group opposition to pipeline construction also pose project delay risks. In conclusion, Energy Transfer is positioned at the intersection of two major trends: the energy transition and the AI revolution. With strong insider buying signals, structural demand growth, and policy support converging, the company appears to offer attractive long-term investment opportunities. However, careful consideration of short-term volatility and geopolitical risks is warranted.

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