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SteelPath commentary on the midstream energy infrastructure industry

April 11, 2025

Latest SteelPath commentary on the Midstream energy infrastructure industry

Each month, the Invesco SteelPath team provides an update and insight on the most recent midstream industry happenings. Each monthly commentary provides:

Market performance update
Recent news
Chart of the month

This month’s overview

Midstream equities, as measured by the Alerian MLP Index (AMZ), outperformed the S&P 500 Index in March as electric power-driven gas demand continued to gain recognition. Robust expectations for natural gas demand growth have been significant for the midstream sector as a majority of the sector’s market cap is focused on natural gas related infrastructure. While forecasts vary, gas demand from liquefied natural gas (LNG) exports and pipeline exports to Mexico, combined with generation driven demand to support electric vehicles, data centers, and cryptocurrencies may roughly double from approximately 27 billion cubic feet per day (Bcf/d) in 2024 to almost 56 Bcf/d by 2030.¹

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Commentary archives

March 2025

February 2025

January 2025

November 2024

October 2024

September 2024

August 2024

June 2024

May 2024

April 2024

March 2024

February 2024

January 2024

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Source: All data sourced from Bloomberg L.P. as of 3/31/2025 unless otherwise stated.
1
Antero Resources, Natural Gas Fundamentals, March 3, 2025

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EV/EBITDA is a ratio that compares a company's total value (Enterprise Value or EV) to its earnings before interest, taxes, depreciation, and amortization (EBITDA).

Midstream equities are represented by the Alerian MLP Index.

Midstream MLPs ended March up 0.1% on price basis and after distributions are considered. The AMZ outperformed the S&P 500 Index’s 5.6% total return loss for the month. The best performing midstream subsector for March was the Marine group, while the Compression subsector underperformed, on average.

For the year through March, the AMZ is up 10.7% on a price basis, resulting in a 12.6% total return. This compares to the S&P 500 Index’s 4.6% and 4.2% price and total return losses, respectively.

An investment cannot be made into an index. Past performance does not guarantee future results.

The Alerian MLP Index (AMZ) The Alerian MLP Index is the leading gauge of energy infrastructure Master Limited Partnerships (MLPs). The capped, float-adjusted, capitalization-weighted index, whose constituents earn the majority of their cash flow from midstream activities involving energy commodities, is disseminated real-time on a price-return basis (AMZ) and on a total-return basis (AMZX).

The opinions referenced above are those of the author. These comments should not be construed as recommendations but as an illustration of broader themes. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations. The opinions are based on current market conditions and are subject to change. They may differ from these of other Invesco investment professionals.

Most MLPs operate in the energy sector and are subject to the risks generally applicable to companies in that sector, including commodity pricing risk, supply and demand risk, depletion risk and exploration risk. MLPs are also subject to the risk that regulatory or legislative changes could eliminate the tax benefits enjoyed by MLPs, which could have a negative impact on the after-tax income available for distribution by the MLPs and/or the value of the portfolio’s investments. Although the characteristics of MLPs closely resemble a traditional limited partnership, a major difference is that MLPs may trade on a public exchange or in the over-the-counter market. Although this provides a certain amount of liquidity, MLP interests may be less liquid and subject to more abrupt or erratic price movements than conventional publicly traded securities. The risks of investing in an MLP are similar to those of investing in a partnership and include more flexible governance structures, which could result in less protection for investors than investments in a corporation. MLPs are generally considered interest-rate-sensitive investments. During periods of interest rate volatility, these investments may not provide attractive returns.

Energy infrastructure MLPs are subject to a variety of industry-specific risk factors that may adversely affect their business or operations, including those due to commodity production, volumes, commodity prices, weather conditions, terrorist attacks, etc. They are also subject to significant federal, state and local government regulation.

ETF Shares are not individually redeemable and owners of the Shares may acquire those Shares from the Fund and tender those Shares for redemption to the Fund in Creation Unit aggregations only, typically consisting of 10,000, 20,000, 25,000, 50,000, 80,000, 100,000 or 150,000 Shares.