Most investment-grade midstream companies could weather a quarter or two of softening crude oil prices, analysts with Standard & Poor’s Ratings Services said during a webcast on Tuesday.

Michael Grande, director for utilities and infrastructure on the midstream energy/refining and marketing team, said the first side of the sector that would be impacted would likely be gathering and processing in the event of a prolonged downturn because NGL is tied directly to oil. A company such as ONEOK Partners LP could weather a short-term softening of prices, he said, adding that also, Plains All American Pipeline LP and Magellan Midstream Partners LP both have stable cash flows from take-or-pay contracts and their financing is strong enough to withstand minor price movements.

“A longer-term [downturn] could have an adverse impact on the sector in general,” Grande said.

In Canada, many of the midstream players are similarly situated, said Gerry Hannochko, director of Canadian corporate ratings for the agency.

“The Canadian midstream is a lot like some in the U.S. With take-or-pay [contracts], a short-term blip will not have much of a credit impact longer term,” Hannochko said. However, there is some worry that three- and five-year gathering contracts wouldn’t be renewed, and there would be a general risk of a slowdown in the overall industry. A slowdown of bitumen production in Alberta could impact the development of large scale pipelines, he said.

But for now, the outlook in Canada, especially Alberta, is positive, Hannochko said. About $10 biIlion in intra-Alberta projects are progressing and most are on a long-term contracted take-or-pay basis of five to 10 years.

Canada also has several large-scale LNG projects proposed, $40 billion worth of them. Including Petronas, BG Group, Apache/Chevron and Veresen, 17 projects have been proposed.

However, the market itself is waiting for some degree of certainty while the British Columbian government weighs royalty certainty. An “LNG tax” has been proposed specific to the sector, and timing is becoming critical as companies risk becoming a “second mover,” Hannnochko said. Especially in Alberta, companies are looking to move forward on major projects, but they see risks associated with permitting, financing and regulatory concerns that can impact cash flow.

“It’s like a poker game waiting to see what [taxes] look like before making final investment decisions,” he said.

Outside of Alberta, the midstream has a less rosy outlook, he said. Regulatory uncertainty and permitting issues are more common outside the province.