For much of its early history, Energy Transfer was a natural gas company. That was not a problem when gas markets were healthy. But when prices fell sharply after the 2008–09 financial crisis, the company’s near-total dependence on a single commodity became a vulnerability. Kelcy Warren‘s response was to diversify deliberately, systematically, and faster than most of his peers.

“We were 99.9 percent natural gas-driven,” Warren has said. By the mid-2010s, Energy Transfer had remade itself into a company with roughly equal exposure to natural gas, natural gas liquids, crude oil, and refined products. That balance, Warren has explained, functions as a built-in hedge: when one commodity falls, others often rise.

Adding Streams

The path to diversification ran through a series of well-chosen acquisitions. The Louis Dreyfus natural gas liquids assets, acquired in 2011, marked Energy Transfer’s entry into a business segment dominated at the time by Enterprise Products. “We weren’t in that business at all,” Warren has noted. “Now we are alongside them on that business.” Sunoco’s addition in 2012 brought refined products. Regency Energy Partners in 2015 extended the NGL footprint further.

Today, Energy Transfer exports approximately 20 percent of global natural gas liquids and is the only midstream operator moving product from both the Gulf Coast and East Coast. The company operates the longest NGL Y-grade pipeline in the Western Hemisphere, the Lone Star Express, which began service in 2016.

Kelcy Warren has framed diversification not just as risk management but as opportunity capture. Each new commodity stream opened a different set of market spreads, customers, and growth vectors. The company that once moved gas through a few hundred miles of East Texas pipe now handles virtually every major hydrocarbon product across a network approaching 125,000 miles. Warren has said plainly: “You name a product in the energy sector, and we move it.” Visit this page on LinkedIn, for additional information.

More about Kelcy Warren on https://www.energytransfer.com/leadership/