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Calendar 2012 third-quarter results confirmed that many master limited partnerships remain in good health.

By contrast, the operating environment has become somewhat less favorable in recent months.

The sharp drop in North American natural gas prices in the first half of the year has led to an equally dramatic cut back in gas drilling.

Natural gas liquids ((NGL)) prices crashed as well, reducing the appeal of ramping up output in the near term.

Gas and NGLs have rebounded somewhat. But the negative reaction to an unexpected boost in inventories in late November is the latest sign that we're probably close to an upward limit for prices, given what's still a sizeable supply-demand imbalance.

Meanwhile, worries that a US fiscal cliff will further wreck the global economy have put downward pressure on oil prices. That in turn has called into question oil related projects, demonstrated by ONEOK Partners LP's (NYSE: OKS) tabling of a planned oil pipeline connecting the reserve rich Bakken Shale region to major refineries.

Unfortunately, these conditions are unlikely to improve substantially in the near future. Demand for natural gas to generate electricity, fuel transportation and power-heavy industry is rising - but not fast enough to absorb the enormous new supplies from shale deposits.

In fact, until there are sufficient facilities for exporting the fuel from these shores the price of North American gas is likely to remain depressed by a supply glut. And that's likely to be several years, even if financially shaky Cheniere Energy Partners LP (NYSE: CQP) successfully develops the Sabine Pass facility.

That puts all the pressure on oil to pick up the slack for producers' earnings the next few years. And until there's some clarity on the fiscal cliff and other issues affecting expectations for economic growth in 2013, black gold is unlikely to set any price records either.

The result is a cautious drilling environment at best for 2013. And that means new midstream development will at a minimum be less robust than it's been the past few years. There will still be new projects. And until growth does flare up, borrowing costs will remain very low. But it's going to take a lot of management skill to keep dividends growing, with no rising tide to raise all boats.

Fortunately, based on the most recent round of numbers, management guidance and what we've seen since on the transaction front, MLPs are still proving up to the challenge. And prices are more reasonable than they've been in a while for new buyers.

Some, of course - including DCP Midstream Partners LP (NYSE: DPM), Genesis Energy LP (NYSE: GEL), Magellan Midstream Partners LP (NYSE: MMP) and Oiltanking Partners LP (NSDQ: OILT) - are priced rather expensively at the moment.

Each of these MLPs seems to have been put on a pedestal of elevated expectations that even "blow-the-doors-off" performance could disappoint.

Rather than chase them, the wise course is to wait for a dip, which, as we've seen repeatedly in recent years, can occur for reasons that have nothing whatsoever to do with underlying company health.

Inergy Midstream LP (NYSE: NRGM), on the other hand, looks attractive at current levels. The 26 percent jump in third-quarter cash flow demonstrates that recent acquisitions and expansion of energy midstream assets is paying off. And the 41 percent surge in distributable cash flow clearly indicates the long-term path for distributions is up.

Looking ahead, Inergy expects several new assets to keep cash flow growth going. Meanwhile, third-quarter transportation revenue more than doubled, while sales from "hub" services more than tripled, even as the company was able to cut costs. That offset flat results in energy storage.

Inergy's purchase of Rangeland Energy LLC for $425 million is another show of strength, as was its arrangement to raise $225 million of equity capital to partially finance the deal.

The transaction adds crude oil rail, terminal, storage and pipeline facilities that will immediately boost cash flow after closing, which is expected to occur on Dec. 7. The company also priced $400 million in eight-year notes at an interest rate of around 6 percent, reducing its traditional dependence on credit lines and hence exposure to interest rate swings.

Source: Inergy Midstream Looks Attractive Amidst MLP Peers