NEW YORK—With a little time and distance from the pain of the last downcycle, some perspective emerges.

“The shocks of the last few years have done some good for the industry,” said Nazar Massouh, CEO of private lender Orion Energy Partners. “The shocks took the midstream from being thought of as an annuity and has allowed smarter risk takers to have a larger role.”

Massouh spoke at the S&P Global Platts annual Global Energy Outlook Forum Dec. 7.

At a macro-economic energy conference addressing oil, gas, nuclear, renewables and even coal, it might seem that the midstream might get lost in the shuffle. But from the opening speakers and panel, the pipes were calling.

Detailing that smarter risk taking, Massouh cited new midstream contracts. “Pricing risk for the midstream in the new environment of oil and gas prices means some risk management needs to be done by midstream companies to protect their downsides. They need a floor. That has to be done by the operators themselves, not just the financial managers.”

Orion, he said, does old-fashioned project finance, making small to mid-sized loans of $25 million to $150 million.

Mark Florian, head of energy and power infrastructure funds at private-equity major BlackRock, concurred.

“Not all midstream contracts are equal,” he said. “It used to be that there was a choice of renting pipe or using pipe. Since the downturn other types are more common. They include fixed fees, but those carry volumetric exposure. There are also acreage dedication, cost of operations, and others. Whatever the terms, they need strong hedging.”

There is also a much closer attention being paid to shippers and all of the counterparties.

“Who are your customers?” Florian asked. “The industry has had plenty of companies go bankrupt. There has got to be a strong focus on counterparties. There should also be a diversity of counterparties.”

As an example he cited a recent investment by BlackRock in a midstream operator called Glass Mountain in Oklahoma’s Stack play. “We have taken some volumetric risk there,” said Florian, “but it is still an attractive deal given the region and the opportunity for growth.”

Early in November, Florian’s fund and Navigator Energy Services agreed to pay $300 million to NGL Energy Partners for its half of Glass Mountain. The deal is expected to be completed by year-end. Glass Mountain is a fully integrated, multi-play crude transportation system in Oklahoma, which serves the Stack/Merge, Granite Wash and Mississippi Lime plays. It has 1 million barrels of owned storage at Cushing.

The original 215-mile system began commercial operations in 2014. A 44-mile extension into the Stack was announced in December 2016, and is expected to be complete by the end of the year. The new total capacity will go to 210,000 barrels per day and 1.8 million barrels of storage, including 1 million barrels in Cushing. As Florian noted, the pipeline is supported by long-term agreements with producers, including both take-or-pay and area dedications.