A Few Good Spot LPG Cargoes: 2Q26 Preview; Stay Hold

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A Few Good Spot LPG Cargoes: 2Q26 Preview; Stay Hold

iness to capitalize on the commodity

dislocation in 2Q26. EPD's fundamental business has higher commodity exposure vs large cap

peers like ET and is comparatively better positioned to out-perform in periods of commodity

dislocation, across its NG (i.e. Waha marketing), LPG, PetChem (i.e. Octane enhancement, etc.).

Waha-USGC spread in 2Q26 was sequentially wider than in 1Q26, and EPD system carries

~380mmcf/d of spot capacity to capitalize on the discounted Waha gas (vs ET's 150-160mmcf/ .Source: Jefferies LLC, Visible Alpha, and FactSet

d). In addition, with the COD of its NRT phase II in 2Q26, EPD would have 4-6 spot cargo per

month of capacity (vs ET's 1-2 spot cargo capacity per month). Lastly, we note that EPD's PetChem

segment could also see commodity-supported tailwind, albeit the precise economics are more

opaque. Taken together, the 2Q26 realized commodity deck points to another strong quarterly print for

EPD.

LT, structurally higher crude provides a defendable floor to Permian associated gas growth, while

the rising GOR is the driver of upside. We believe crude prices will emerge structurally higher from

the Iranian conflict as the global market prices in a 'security risk premium'. It is too early to ascertain

if the higher commodity strip will incentivize additional rig counts, but it should offer a defendable

Julien Dumoulin-Smith * | Equity Analystfloor to current Permian crude production outlook and the associated gas growth thesis. Upside, in

+1 (281) 774-2066 | jds@jefferies.com

turn, is driven by the rising GOR at the Permian, driving EPD's revised plant growth outlook.

Paul Zimbardo * | Equity Analyst

We establish our 2Q26 adjusted EBITDA of $2,618Mn; -2% vs consensus estimates of $2,676Mn.