Generally speaking, natural gas midstream service providers have not garnered the kind of attention enjoyed by E&P companies or their upstream suppliers in terms of roles played in unlocking and accessing growing unconventional natural gas production across North America.
But with significant development of these unconventional resources being carried out in areas with constrained or otherwise limited midstream infrastructure, providers of gas gathering, processing and related services are clearly right in the thick of things these days.
Midstream Suppliers Show Modest Gains with Customers
Despite scores that continue to trail other oilfield supply segments, customers' ratings of U.S. midstream service providers showed a modest (almost five-percent) uptick in EnergyPoint Research's recently completed 2011 customer satisfaction survey.
Of course, there's still plenty of work to be done before the midstream segment closes the yawning gap that exists between it and its industry counterparts, but the difference, at least for now, appears to be narrowing. Two areas in particular currently showing strength with midstream customers are back-office systems/administration and operations.
On the other hand, customers continue to be dissatisfied with the pricing and contract terms they receive from their midstream suppliers. There is, however, evidence to suggest these lower ratings have more do to with a perceived lack of "value-add" offered by midstream providers, especially as compared to suppliers providing more high-profile downhole and wellsite products and services, than with the actual prices and contract terms customers are experiencing.
MarkWest and Copano Rank Highest; Larger Players Make Strides
In terms of overall satisfaction, Denver-based MarkWest Energy (MWE) took first place in the 2011 survey, improving upon its runner-up status just two years ago. MarkWest's ratings were driven primarily by a strong showing in the area of project development, as well by its ratings in the Ark-La-Tex and Marcellus regions.
Copano Energy (CPNO) finished second overall in the survey, generating first-place rankings in a number of survey categories, including operations and onshore gathering. Companies rounding out the survey's top-five include Williams (WMB), CenterPoint Energy Field Services (CNP) and Kinder Morgan (KMI).
DCP Midstream, a joint-venture between Spectra Energy (SE) and ConocoPhillips (COP) and one of the largest players in the midstream space, saw its ratings improve materially with total satisfaction rising an adjusted 15.9 percent over 2009 levels. The company showed particular improvement when it comes to its systems and administration.
DCP's overall satisfaction level, along with those of Williams, CenterPoint Energy and Kinder Morgan, suggests customer satisfaction is not the exclusive realm of smaller regional or niche players it has been in the past. On the other hand, lower-rated providers in the survey include Anadarko Midstream (APC) / Western Gas Resources (WES), Crosstex Energy Services (XTXI) and Southern Union (SUG).
We note that ONEOK (OKE) recorded the largest positive change in ratings since 2009.
Looking for Less M&A, Better Service
A penchant for "growth-through-acquisition" has been a headwind for midstream customer satisfaction levels in the past as transformational mergers and the significant disruptions that can accompany them have hurt suppliers' abilities to forge the kinds of stable long-term relationships needed to generate higher customer satisfaction levels.
While EnergyPoint's data do show customers to be more focused on the prices and contract terms they receive from midstream providers than from other upstream suppliers, the survey data also reveal that service and professionalism historically trumps even price as a significant driver of customer satisfaction.