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Avi Salzman — The Pipeline-Building Boom Is Back. Why Investors Are Wary of the Stocks.

"We think this is a great time in general to be allocated to the space" — but focus on natural-gas pipelines over oil/liquids transporters.
2025-DEC-02 · Barron's · by Avi Salzman (quoting Parag Sanghani, Westwood Group, & Rob Thummel, Tortoise Capital) · written article · Read ↗ · transcript · actionable insights
One-line take: North America is in a record pipeline-building boom — a projected $53B of growth capex this year (past the $49B 2019 peak), driven by Gulf-Coast LNG exports and natural-gas pipelines feeding power plants for new data centers. Adjusted-earnings growth is being marked up to 6–8% (from 4–6%). Yet the stocks have lagged badly — the Tortoise North American Pipeline Fund is up just 4% vs the S&P's 16% — on weak oil (down 15%) and the memory of the 2015 bust, when even Kinder Morgan cut its dividend. Westwood's Parag Sanghani argues today's bigger cash-flow cushions de-risk the dividends and says to favor natural-gas pipelines (Williams, Kinder Morgan) over oil/liquids transporters (Energy Transfer, Oneok); Tortoise's Rob Thummel pins the underperformance on oil. (This is a Barron's reporter's article, not a commentator's own market call — stances below reflect how each name is framed in the piece.)

1. Stocks & names mentioned

A written Barron's article (no video), so the "At" column links to the article rather than a timestamp. Stance reflects how each name is framed in the piece — and the analysts' "natural-gas over oil/liquids" lean — not a price target. Research legend: QT Qualtrim · SA Seeking Alpha · STK Stock Analysis. Ordered Positive → Neutral.

TickerNameResearchViewWhat the article saidAt
WMBWilliams Cos.QT · SA · STK · FAPositiveThe article's best performer (up 10% YTD) — "focuses on natural gas and has a side business supplying power plants for data centers." Squarely in Sanghani's preferred natural-gas-over-liquids bucket.read ↗
KMIKinder MorganQT · SA · STK · FAPositiveBuilding pipelines to supply the Gulf-Coast LNG terminals; projects US natural-gas demand could jump 28 Bcf/d by 2030 (>25% above 2024). A natural-gas growth play — though the article also flags it as the 2015 cautionary tale, when even Kinder Morgan cut its dividend.read ↗
ETEnergy TransferQT · SA · STK · FANeutralBuilding natural-gas pipelines to three Oracle data centers (two in Texas) — a clear data-center demand win. But it "serves both oil and natural gas markets" and is down 15% YTD; the mixed oil/liquids exposure is what Sanghani favors less than pure-gas names.read ↗
OKEOneokQT · SA · STK · FANeutralBuilding fuel pipelines into Denver (e.g. gasoline) — a liquids-oriented expansion. A solid midstream name, but the liquids tilt is the kind Sanghani favors less than the natural-gas pipelines.read ↗
MPLXMPLXQT · SA · STK · FANeutralOhio-based midstream MLP; cited as a case where the rising capital-expenditure budget is "partially related to acquisitions" rather than purely organic growth projects.read ↗
TPYPTortoise North American Pipeline FundSA · STK · FANeutralThe article's sector proxy — up just 4% YTD versus the S&P 500's 16%, illustrating how far midstream has lagged despite the record build-out. (Rob Thummel is a senior PM at the fund's manager, Tortoise Capital.)read ↗
ORCLOracleQT · SA · STK · FANeutralNamed only as the data-center customer Energy Transfer is building natural-gas pipelines to serve (three sites, two in Texas) — a demand-side reference, not an investment view on Oracle.read ↗

2. Talking points

A record pipeline-building boom

What's driving it — LNG exports + data centers

The bull case — faster earnings growth

The bear case — the ghost of 2015

Wide dispersion — business model matters

The takeaway — favor gas, mind the cushion

3. In plain English

A jargon-free summary of how each name is framed in the article — what it does and why the stance. (Plain-language companion to the table above; renders on each ticker's consolidated page.)

WMB — Williams Cos. Positive

Williams owns long-haul natural-gas pipelines — the toll roads that move gas around the country. It's the article's standout (up 10% this year) for two reasons: it's almost purely natural gas (not oil), and it has a growing side business piping gas to power plants that run AI data centers.

That matches the analysts' core advice — in a year when oil is weak, the gas-focused pipeline names are holding up far better than the ones tied to oil.

KMI — Kinder Morgan Positive

Kinder Morgan is one of the largest US natural-gas pipeline operators. It's building pipes to feed the Gulf-Coast terminals that chill gas into LNG for export, and it expects US gas demand to jump more than 25% by 2030 as exports and data-center power demand climb — a multi-year growth runway.

The catch the article raises: Kinder Morgan is also the poster child for the last bust — in 2015 it slashed its dividend after over-building into a commodity downturn. So it's a gas-growth winner that doubles as the cautionary tale about getting over-extended.

ET — Energy Transfer Neutral

Energy Transfer is a giant pipeline network (structured as an MLP) that moves both oil and natural gas. The good news in the article: it's building gas pipelines to three Oracle data centers, a direct play on AI power demand. The bad news: the stock is down 15% this year because its oil exposure drags it when oil prices fall.

That split is exactly why the analysts say to prefer pure natural-gas pipelines: ET's mixed oil-and-gas business makes it more exposed to weak oil than a gas-only name like Williams.

OKE — Oneok Neutral

Oneok is a midstream company expanding pipelines that carry liquid fuels — for example, gasoline lines into Denver. It's a solid operator riding the same build-out boom.

But it sits on the "liquids" side rather than the natural-gas side, and the article's analysts specifically advise favoring gas pipelines over the oil-and-liquids transporters in a weak-oil environment — so it's framed more cautiously than the gas names.

MPLX — MPLX Neutral

MPLX is an Ohio-based pipeline partnership (an MLP). The article uses it to make a nuance point: not all the rising spending is new pipe in the ground — for some companies, like MPLX, a chunk of the bigger capital-spending budget comes from buying other businesses (acquisitions) rather than organic growth projects.

TPYP — Tortoise North American Pipeline Fund Neutral

This is an exchange-traded fund that holds a basket of North American pipeline stocks, so it's a quick read on how the whole group is doing. The article's headline number comes from it: up just 4% this year versus the S&P 500's 16% — a vivid illustration of how badly midstream has lagged the market despite a record building boom.

The takeaway isn't "buy this fund" so much as "the sector is cheap and out of favor" — which is the setup the analysts find interesting.


Summary derived from the public Barron's article (full text saved in transcript.txt) for personal study. Not investment advice. © Barron's / Dow Jones for source material.