Wednesday, October 19, 2011

Infrastructure and Growth

With the ups and downs in the natural gas market and the recent big deals with producers (i.e. BHP buying Petrohawk), it's sometimes easy to forget about the pipeline guys.  This weekend's deal between Kinder Morgan and El Paso with an enterprise value of around $38 billion broke that spell.  That was followed yesterday by the news yesterday that Crestwood Midstream Partners, LP has agreed to buy Tristate Sabine, LLC, which provides 52 miles of gathering pipelines in Sabine Parish, for $65 million.

Here is a good article that sums up recent developments in the infrastructure "space."  The challenges and opportunities are great, but the midstream side of the business will be key to the viability of long-term domestic energy production.  The article correctly suggests that the "one word" Mr. McGuire urges Benjamin to remember in the movie "The Graduate" might today be "infrastructure" rather than "plastics."

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