Midstream energy investments, whether public securities or private markets allocations, have long been sought after by infrastructure investors, but the sector has changed in recent years. Once a reliable go-to investment for stable cashflows and growth, the sector hit a rough patch starting in 2014, when global oil prices tanked. With balance sheet and financing challenges between 2014 and 2018 and ongoing volatility in 2019, can midstream energy again become a sweet spot for investors?

As the name indicates, the midstream sector contains the middle of the oil and gas supply chain — the gathering, transport, storage and processing functions, including assets such as pipelines, rail cars and processing plants. This is compared to the upstream exploration sector — comprised of the drilling and production assets at well heads — and the downstream distribution and sale processes, including refineries and local utilities.

While not immune, midstream energy is general