FTAI Infrastructure is painting a picture of aggressive expansion into clean energy, with multi-million dollar contracts and a narrative of "transformation." But beneath the surface, a subtle shift in their core business could be a stronger indicator of their future direction – and it's one that might surprise even seasoned analysts.

The company touts a potential $75 million in annual EBITDA from new projects at Jefferson, emphasizing clean hydrogen-based fuels and ammonia exports. At Repauno, the story is similar, with Phase 2 poised to "quadruple" natural gas liquid capacity. All of this is presented against a backdrop of growing concern about climate change and investor appetite for sustainable ventures.

However, a closer look at Transtar, FTAI Infrastructure's "cash cow" railroad segment, reveals a more nuanced strategy. While clean energy projects grab headlines, Transtar is quietly undergoing a revolution of its own, one with potentially greater long-term impact on the company's bottom line.

Remember, Transtar was originally an internal subsidiary of U.S. Steel, confined to serving its parent company. When FTAI Infrastructure acquired it in 2021, third-party revenue was practically non-existent. Fast forward to today, and that figure stands at a respectable $22 to $25 million annually.

This growth might seem modest in comparison to the splashy pronouncements about ammonia and hydrogen, but it represents a fundamental change in Transtar's DNA. The company is actively pursuing third-party business, expanding its customer base and revenue streams. This diversification strategy, while less glamorous than "clean energy," is potentially more reliable and lucrative.

FTAI Infrastructure's stated goal is to triple or quadruple third-party revenue at Transtar. Let's break down the potential impact:

This additional EBITDA from Transtar alone could be a significant driver of shareholder value, rivaling the projected contributions from much-hyped clean energy projects.

Furthermore, this diversification opens Transtar to a wider range of economic conditions. While clean energy projects often hinge on government subsidies and evolving regulatory landscapes, Transtar's third-party expansion taps into a broad swathe of industries, providing a buffer against market volatility.

This is not to say that FTAI Infrastructure's clean energy ambitions are insignificant. But their strategic focus on diversifying Transtar, a move flying under the radar of most analysts, could prove to be the company's real ace in the hole. It's a classic case of quiet competence outperforming flashy pronouncements.

Is FTAI Playing a Long Game?

Here's the intriguing hypothesis: is FTAI Infrastructure leveraging the allure of "clean energy" to mask a more fundamental, and potentially more profitable, shift towards a broader infrastructure play? Are they positioning themselves not just as a green energy player, but as a diversified infrastructure powerhouse, leveraging their existing assets and expertise to capitalize on a much wider range of opportunities?

The next few quarters will be telling. If Transtar's third-party revenue continues its upward trajectory, outpacing growth in their clean energy segments, it will be a clear signal that FTAI Infrastructure is playing a long game, one that extends beyond the current clean energy hype cycle. Investors and analysts alike would be wise to watch this space closely.

Transtar's Revenue Growth

The following chart illustrates the potential growth in Transtar's third-party revenue based on FTAI Infrastructure's stated goals.

"Fun Fact: Did you know that FTAI Infrastructure's Long Ridge Energy Terminal boasts one of the most efficient combined-cycle power plants in the United States? It uses cutting-edge technology to achieve a remarkable 98% capacity factor, ensuring reliable energy generation and minimizing environmental impact. This commitment to technological advancement underscores the company's potential to become a key player in the evolving energy landscape, regardless of which direction they ultimately choose."