Houston — Midstream operators are preparing to release financial results for the second 

quarter  as  a  flurry  of  oil drilling activity in the Permian Basin creates the need for more 

pipelines to move associated gas production. 

The  industry  dynamics  reflect  a  focus  on  Texas as a land of opportunity following an 

infrastructure  build-out  in the US Northeast, where significant takeaway capacity is now 

coming online or will in the near term but prospects for future projects face challenges fro

m environmental opposition. 

Kinder  Morgan,  which is scheduled to kick off the sector's earnings reporting season on 

Wednesday, has proposed two gas pipelines to serve the Permian with a combined capac

ity  o   up  to  4 Bcf/d. The efforts are part of an all-in gas strategy for the Houston-based 

company, which already transports more than one-third of the gas consumed in the US. S

ome analysts are suggesting that even more could be done in the Permian. 

"As any energy investor now knows, we are tight pipeline capacity out of the Permian for 

crude and gas," Sanford C. Bernstein & Co. analyst Jean Ann Salisbury said in a July 11 

research note to clients. "We believe Kinder Morgan and Williams are best positioned as 

they provide options to continue east to Louisiana." 

Investors will get a glimpse of pipeline companies' growth plans when they release their re

sults for the April-June quarter over the next several weeks. Besides Kinder Morgan, EQT 

Midstream Partners is scheduled to report its results on July 26, followed by Williams, 

Dominion Energy and Enterprise Products Partners on August 1 and TransCanada, Pembina 

Pipeline and Enbridge on August 2. 

The market also will be looking to hear about efforts by some companies to overhaul their 

corporate structures to stem the impact of a US Federal Energy Regulatory Commission tax 

policy decision in March. Midstream companies organized as master limited partnerships are 

affected. Since the decision, both Williams and Enbridge have announced simplification 

plans, while Dominion and Energy Transfer Partners have said they are weighing structure 

changes. For its part, Kinder Morgan is making a big bet on the Permian, a prolific production 

basin that spans West Texas and southeastern New Mexico.