Midstream/MLP 4Q Buybacks Add to Robust 2024

• Six constituents in the broad Alerian Midstream Energy Index (AMNA) spent a combined $740 million on equity repurchases in 4Q24, bringing aggregate 2024 buybacks in the midstream/MLP space to $3.76 billion.
• Over 85% of AMNA by weighting currently have a buyback authorization in place.
• Looking to 2025, midstream companies will continue to weigh buybacks against other uses of capital, including robust growth opportunities around natural gas and natural gas liquids.

Select midstream companies continued to execute on stock buybacks in 4Q24, with two new names completing their first repurchases under 2024 authorizations. Repurchases in 2024 are notable given strong equity price performance seen last year, as broad midstream (AMNA) rose 36.71% on a price-return basis. Today’s note recaps equity repurchases seen in 4Q and FY 2024 and discusses the outlook for buyback activity in 2025.

Six names in the Alerian Midstream Energy Index (AMNA) utilized their buyback authorizations in 4Q24, repurchasing an aggregate $740 million in common equity. Notably, two corporations were active with buybacks for the first time under authorizations put in place in 2024.

Throughout 2024, eight names in total repurchased $3.76 billion in common equity, though only five names spent over $100 million. Aggregate buybacks picked up in the fourth quarter, following $650 million spent in 3Q24 (read more). Buybacks were more sizable in the first half of 2024 at $1.02 billion in 2Q24 (read more) and $1.49 billion in 1Q24 (read more). Year-over-year, total buyback spend was slightly above the $3.7 billion seen in 2023 (read more) but was below the $4.5 billion recorded in 2022 (read more).

Cheniere Energy (LNG) continued to lead buyback activity, repurchasing $281 million in common equity during 4Q24, bringing its total buyback spend to nearly $2.3 billion in 2024. LNG accounted for 60% of total midstream buybacks last year. Notably, since announcing its first buyback program in June 2019, the company has repurchased over $5.5 billion of its shares. At the end of 2024, Cheniere had $3.9 billion remaining under its current authorization, which was upsized in June 2024.

Meanwhile, ONEOK (OKE) executed on its $2 billion authorization in 4Q24 for the first time since the program was initiated in January 2024, repurchasing $159 million in common equity. Targa Resources (TRGP) bought back $108 million of its shares in 4Q24, bringing its total 2024 repurchases to over $750 million. TRGP was active with buybacks in every quarter of 2024, even as shares gained 105% last year.

MLPs MPLX (MPLX) and Enterprise Products Partners (EPD) also continued buying back equity in 4Q24, repurchasing $100 million and $63 million, respectively. Both MPLX and EPD repurchased common equity on a quarterly basis throughout 2024, with MPLX resuming buybacks in 2024 after making no repurchases in 2023. C-Corp Antero Midstream (AM), which announced a $500 million buyback authorization in February 2024, repurchased $29 million in 4Q24, utilizing its program for the first time.

The table below shows the energy infrastructure companies with buyback authorizations and their total repurchases. The table also includes each company’s weighting in AMNA, the Alerian MLP Infrastructure Index, the Alerian MLP Index (AMZ), the Alerian Midstream Energy Select Index, and the Alerian Midstream Energy Corporation Dividend Index. The majority of the indexes by weighting as of March 5, 2025 have buyback authorizations in place. 

Midstream companies have generally prioritized dividend growth over buybacks. Dividend growth has been widespread and is expected to continue (read more), while buyback activity was fairly narrow in 2024 with only five names really driving repurchases. Strong equity performance in 2024 also likely put a damper on buybacks to some extent.

Looking at 2025, the robust environment for growth capital spending related to natural gas and natural gas liquids may limit wider repurchase activity. Buybacks compete with other uses of capital, and project returns remain compelling (typically mid-teen percentages and even higher based on recent announcements). Many companies likely see better bang for their buck in growth projects relative to buybacks or prefer to keep their powder dry as growth opportunities continue to emerge, particularly around natural gas.

For midstream broadly, repurchases are likely to remain largely opportunistic, but a handful of companies have been consistent with quarterly buybacks. These companies have the financial flexibility to prioritize dividend growth, capital projects, and buybacks. Recent equity weakness or other capital allocation initiatives may bring some names off the sidelines. Gibson Energy (GEI CN), which did not repurchase equity in 2024, has guided to CAD $50-100 million in repurchases in 2025.

Repurchase activity in 2024 was fairly concentrated, but the aggregate buyback spend was consistent with levels from 2023. Looking forward, buybacks are likely to remain largely opportunistic, as companies weigh buybacks against compelling growth opportunities.

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AMZI is the underlying index for the Alerian MLP ETF (AMLP) and the ETRACS Alerian MLP Infrastructure Index ETN Series B (MLPB). AMZ is the underlying index for the JPMCFC Alerian MLP Index ETN (AMJB), the ETRACS Alerian MLP Index ETN Series B (AMUB), and the ETRACS Quarterly Pay 1.5x Leveraged Alerian MLP Index ETN (MLPR). AMEI is the underlying index for the Alerian Energy Infrastructure ETF (ENFR) and the ALPS Alerian Energy Infrastructure Portfolio (ALEFX). AMCCD is the underlying index for the Alerian Midstream Energy Dividend UCITS ETF (MMLP).

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For more news, information, and analysis, visit the Energy Infrastructure Channel.

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