In February, the Alerian MLP Infrastructure Index (AMZI) gained 4.5% on a total return basis, as compared to the S&P 500 return of 4.3%. The top performers in the index were Western Gas Partners LP (+12.0%), Genesis Energy LP (+10.0%) and Copano Energy LLC (+9.6%), while Buckeye Partners LP and Energy Transfer Partners LP had difficult months, both declining about 4% each.

Major themes driving these results included a focus on take-away projects for natural gas plays rich in liquids and additional solutions to move crude oil from Oklahoma and West Texas to Gulf Coast refineries. That said, a challenging environment for natural gas prices has impacted natural gas volumes and storage spreads.

Production growth in the liquids-rich Eagle Ford shale and increased demand for natural gas liquids (NGLs) led Enterprise Products Partners to post record earnings for fourth-quarter 2011. In a joint venture with Enbridge Energy Partners LP and Anadarko Petroleum Co., Enterprise is moving forward to construct the Texas Express Pipeline, which will extend 580 miles, taking NGLs from West Texas to Enterprise's NGL fractionation and storage facilities in Mont Belvieu, Texas. Two new NGL-gathering systems are also part of this joint venture, connecting both the Anadarko-Granite Wash production area and the Barnett shale processing plants to the pipeline. For Energy Transfer Partners, two new liquids-focused projects and expansions in the Eagle Ford will help mitigate the effect of low natural gas prices on their gathering pipeline volumes.

Despite low natural gas prices, Western Gas Partners was the highest performing stock in the AMZI in February, as investors strongly supported their announcement of two 100% fee-based, 90% volume-committed, organic projects in the Eagle Ford shale and the Wattenberg field. Western Gas guided to a distribution growth rate of 16% to 20% for 2012 and continues to grow organically and diversify its revenue base, indicating that the support of their general partner is becoming a luxury rather than a necessity.

On the petroleum products front, Buckeye Partners' results were less than analyst estimates due to refinery closures in the Northeast and warm winter weather. During the quarter, however, Buckeye agreed to acquire a marine petroleum products facility in the New York Harbor. Industry analysts remain mixed as to whether this supply diversity and vertically integrated asset will benefit Buckeye or if the execution risk is too high, given already slim distribution coverage ratios. Magellan Midstream Partners LP reported better than expected results for 2011. Higher petroleum pipeline tariffs (federally mandated to increase on July 1) offset lower volumes, and higher butane blending margins and volumes added to strong results.

As it relates to crude, bottlenecks in Cushing, Oklahoma, have begun to create more opportunities for MLPs. The Seaway pipeline, which runs from the Gulf Coast to Cushing, is being reversed through a partnership between Enterprise and Enbridge Inc. Enterprise announced the purchase of additional acreage near their Enterprise Crude Houston Oil (ECHO) terminal. They are expanding the facility, which will be able to take delivery of crude oil from both the Eagle Ford shale and Cushing.

While prices and demand for NGLs continue to remain strong and natural gas prices recover slowly, those MLPs positioned in liquids-rich basins will continue to benefit. This isn't the real estate business, so perhaps the tag line should be "location, exposure, location."

Maria Halmo and Emily Wang, CPA, are directors for Alerian, an independent indexing company that provides objective market information. Over $7 billion is directly tied to Alerian’s indices, which include the leading benchmark of MLP infrastructure equities: the Alerian MLP Infrastructure Index (AMZI). For more information, please visit www.alerian.com

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