Investor interest in midstream assets increased in the later part of the summer after a minor lull in activity earlier in the year. A recent survey from PricewaterhouseCoopers LLC (PwC) showed the ongoing interest in shale acreage and increased investments from foreign buyers helped drive oil and gas mergers and acquisitions to just over $39 billion in the second quarter of 2011.

In second-quarter 2011, PwC counted 51 deals with values exceeding $50 million, compared with 61 deals totaling $41 billion in the same period one year earlier. The average deal value rose to $765 million, compared with $672 million from the same period one year earlier.

“There continues to be steady M&A activity in the oil and gas sector with strong competition for prized assets, which has maintained the deal momentum throughout the first half of the year,” said Rick Roberge, principal in PwC’s energy M&A practice. “Foreign and private equity interest in North American oil and gas assets remains very high and will likely be a driver of ongoing activity.”

A large part of that interest is in the midstream sector, fueled by ongoing concerns that the industry lacks the infrastructure in place to get additional reserves from unconventional shale plays to markets. “Shale gas assets continue to be very attractive acquisition target as multinationals look to gain technical know-how and exploit the long-term value and opportunities from rising energy needs,” said Steve Haffner, a Pittsburg-based partner with PwC’s energy practice.

“At the same time, there is tremendous activity developing around natural gas infrastructure, which is necessary to move the extracted gas to market. The U.S. shale gale continues to attract the attention of global companies,” he said.

The Interstate Natural Gas Association of America estimates that the sector will need as much as $8.2 billion annually through the year 2035 to develop mainlines, laterals, processing facilities, storage, compression and gathering lines, and there is a growing evidence that investors agree the opportunities are there.

EQT Infrastructure’s acquisition of 70% of Houston-based Peregrine Midstream Partners LLC is one just example of foreign interest in the U.S. midstream infrastructure. EQT Infrastructure is a leading private-equity group in northern Europe, with more than €1.2 billion in capital raised since it launched in 2008. Peregrine Midstream is a privately held company founded in 2009 by the former founders and management team of Falcon Gas Storage. (See Storage’s Changing Environment in this issue for additional information).