The ongoing interest from midstream investors continued through the end of the year, although acquisitions and new stock emissions eased moderately in the past six weeks of 2011.

Midstream operators announced more than a dozen acquisitions at the close of the year worth at least $13.4 billion, a figure that clearly shows an ongoing interest in midstream assets.

The largest was the sale by BP PLC of its Canadian natural gas liquids business to Plains Midstream Business Canada, a subsidiary of Plains All American Pipeline LP, for $1.67 billion. The business includes the extraction, processing and transportation of natural gas liquids across Canada and the U.S. Great Lakes. The operations include 2,600 miles of pipelines, storage facilities, processing plants and long-term leases on rail cars that move petroleum products.

The deal was one of a series for both buyer and seller this year. BP made the sale as part of an effort to shed $45 billion in assets. Plains All American, meanwhile, recently announced four separate midstream acquisitions worth a total of $640 million.

Plains All American is also aggressively pursuing an unsolicited takeover of Tulsa-based SemGroup Corp. The unsolicited offer is for all outstanding shares of SemGroup for $24 per share in cash. SemGroup’s management rejected the offer and it’s not immediately clear if Plains will follow up with a more aggressive offer.

Jim Trippon, an analyst and editor-in-chief for DividendGenius.com, said the attempted takeover of SemGroup is further evidence of the interest in the midstream sector. “It confirms that this is an attractive asset class. The M&A activity in this sector has been robust for that very reason,” he said.

Midstream MLPs as a whole continue to attract the attention of investors for a variety of reasons, he said. To start with, many MLPs pay a distribution which yields an average much higher than many other stocks—in some cases more than 7%. MLPs tend to be low-volatility equity holdings. Some investors like the sector because they hedge against riskier assets. Finally, the pass-through tax advantage inherent to MLPs make them attractive to other investors.

“Many conservative investors prefer MLPs to other ways of playing the energy sector, too. The MLPs feature stable businesses that dampen some of the bumps and swings in the oil and gas commodity trade,” he said.

Several midstream operators want to take advantage of the ongoing interest in the sector to hold public offerings. Enbridge Energy Partners LP said it would issue 8.5 million Class A common units at $30.85 per unit. It expected net proceeds of about $254 million to fund capital expansion projects or for general partnership purposes.

Bonanza Creek Energy Inc. announced its initial public offering (IPO) of 14.3 million shares between $20 and $22 per share. Denver-based Bonanza will use proceeds from the IPO to pay down outstanding debt, fund exploration and development programs and to fund the expansion of its gas-processing facilities.

Inergy Midstream LP announced a plan to offer an additional 16 million common units at an estimated price of $19 to $21 each as it prepares for its IPO. It expects to raise about $320 million through the offering. The spinoff of Inergy’s midstream assets into an MLP is part of a broader pattern within the energy industry. Shortly after Inergy’s announcement, EQT Corp. announced plans of forming Equitrans, its pipeline subsidiary, into an MLP. EQT would control the assets as the general partner of the new MLP. The deal is expected to raise up to $300 million.

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