US midstream firms' safety net is fast unraveling. Companies running pipelines, processing plants and gathering facilities have traditionally been immune to the vagaries of oil and gas markets, cushioned by long-term fee-for-service contracts that meant shippers had to pay for capacity booked, regardless of the volumes actually shipped. But the price pain overwhelming upstream producers has started to create big problems for midstream companies, too. Depending on the outcome of lawsuits now being heard in US courts, bankrupt producers could be allowed to cancel the long-term contracts.
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