It's official—2012 will be the year of midstream. With ever more drill rigs, wells, production, gathering, processing, transmission and storage capacities needed to serve the shale plays, this year is heading toward record-setting opportunities. And according to recent data, the trend began last year.

Roger Ihne, a principal of Deloitte Consulting LLP, notes that, although the M&A market has traditionally been driven by exploration and production deals, that trend has been usurped by midstream. For example, during 2011, data show that E&P deals were down from the robust 2010 models, he says, and adds, "But that was more than made up for by a significant increase in the midstream and all of the deals announced there—and some very large deals in that area. Two of the top three deals for 2011 were actually in the midstream area, something that we could have never expected and certainly have never seen before. It shows how transformative the market and the industry have become."

In fact, the largest deal in the oil and gas industry in 2011 took place in the midstream sector: ExxonMobil Corp.

acquired XTO Energy Inc. in a $41-billion deal, which created "the largest natural gas pipeline network in the U.S.," according to the consulting firm. (As an aside, we are pleased to announce that XTO president Jack Williams will speak at Hart Energy's upcoming DUG Conference in Fort Worth for the first time since the merger.)

Also, the industry has seen a new trend of the traditional diversified companies deciding to split their operations into separate upstream and midstream companies. Such splits are likely to continue to drive M&A activity and be part of a trend toward larger transactions.

"We're seeing a new wave of midstream activity, which makes sense given the new challenges of getting resources to market in the U.S.," says Trevear Thomas, another principal of Deloitte Consulting LLP. "Because of the positions of the shale fields, we do not yet have a midstream infrastructure that fully supports the location of E&P activity."

And the deals keep coming. In February, we learned that Delphi Midstream Partners LLC completed its sale of Laser Northeast Gathering Co. LLC to Williams Partners LP in a deal for $329 million in cash and about 7.5 million Williams Partners' units. Also, SemGroup Corp., Gavilon Midstream Energy LLC and Chesapeake Energy Corp. plan a joint venture to build a 210-mile pipeline in western and north-central Oklahoma to move crude to new storage in Cushing. And Teak Midstream LLC plans to build some 200 miles of gas gathering, a residue delivery system and a gas processing plant in South Texas to draw Eagle Ford shale gas and liquids.

Also in February, we learned of other massive investments by midstream companies, although all of the details have yet to be revealed. For example, Dominion Transmission Inc. plans to spend more than $11.6 billion on new plants and other projects during the next five years. Such plans include gathering, processing and transmission infrastructure to serve production from the Marcellus and Utica shales.

And Enbridge Energy Partners LP is planning to spend some $2.1 billion on new organic growth projects, driven by the strong fundamentals it sees in liquids and natural gas processing opportunities.

Not to be left out, Marathon Petroleum Corp. announced that it plans a possible formation and initial public offering of a master limited partnership offering most, if not all, of its 9,600 miles of pipeline assets, which are valued at about $6.2 billion. The event will be held sometime after second-quarter 2012, unless the company leaders change their minds.

Whew. That's a lot of business for an editor to track. One wonders what March will bring. To find out, we hope you will join us at Marcellus Midstream Conference and Exhibition on March 19th through the 21st in Pittsburgh, and we will find out together, because even I never quite know what these executives are going to divulge on stage—but that's the fun of it!

For all the details, please visit www.marcellusmidstream.com. Also, for details on the DUG Conference, please visit www.dugconference.com. Save the dates! (And for special pricing, email me at jstell@hartenergy.com)