After a harsh winter throughout most of the U.S., tentative signs of spring have emerged. While frigid weather in the Northeast made headlines during the past few months, unseasonably cold temps flowed down through Oklahoma and Texas as well.

During the deep freeze, many midstream-construction project managers had to close their offices and hunker down to wait out the storms. Now, the industry is back to business. And by all indications, it is starting back up with a bang. So, ladies and gentlemen, start your engines.

Midstream builders and operators have their hands full, following producers into new or rejuvenated onshore plays, driven by investment dollars originally directed towards deepwater drilling in the Gulf of Mexico. Interest is being redirected into plays such as the New Albany, Collingwood, Niobrara, Marcellus, Eagle Ford, Barnett, Granite Wash, Mississippi Chat and Mississippi Lime, Avalon, Wolfberry and Lower Tuscaloosa. New gathering and transmission lines and processing plants are in high demand in many of these areas.

At the recently held NAPE Expo (formerly North American Prospect Expo), the buzz was all about new opportunities. Many of the properties up for grabs included shale-gas plays, but low natural gas prices have chased off some of the more reticent buyers—and with good reason. A barrel of West Texas Intermediate on Nymex is currently priced some 22 times higher than Henry Hub natural gas on a per million Btu basis.

Therefore, it comes as no surprise that NAPE exhibitors offering oil and rich-gas properties were generally the most mobbed by attendees. But there are exceptions to every rule.

One such exception is BHP Billiton’s agreement to acquire all of Chesapeake Energy Corp.’s interests in the Fayetteville shale-gas play for some $4.75 billion, which BHP expects to fund from cash resources. The acquisition includes Chesapeake’s major pipeline system, providing another example of the recent trend of producers selling off midstream assets to fund development of liquids-rich gas and oil.

Yes, especially oil. Recently, oil prices spiked on widespread civil unrest in Egypt, Libya, Bahrain, Yemen, Kurdistan and Iran, lending further credence to U.S. producers’ new focus on onshore oil, gas and gas liquids. In fact, on February 22 oil prices soared to the highest level in more than two years as violence spread in Libya, although only a small amount of Libya’s oil production appears to have been affected by the unrest. Yet, analysts fear that revolts will spread to OPEC heavyweights like Iran.

As a result, benchmark West Texas Intermediate for April delivery jumped $4.50, or 5%, to $94.21 per barrel on Nymex. The April contract traded as high as $98.48 per barrel. Could a $120 price tag be heading this way? Retail gasoline prices are now at a national average of $3.17 per gallon, and the summer driving season is just around the corner.

Such speculation continues to incentivize producers toward liquids-rich plays, despite widespread rumors that well completions are delayed due to take-away capacity constraints. So, just like spring flowers, this editor expects to see new construction projects begin popping up all over.

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