The depressed energy price environment is finally starting to spur takeover bids. And, with the recent $53.1 billion takeover bid for Williams Companies being deemed too low by management, expect other midstream companies receiving bids to expect better valuations as well. These are our top three choices for midstream takeover targets that are worth much more than their current share prices. 

Low oil prices could finally be about to spur a merger and acquisition rally in the oil and gas industry. But it isn’t the oil exploration industry, where many people were expecting it. Rather, it’s the midstream pipeline space.

The big news is that Energy Transfer Equity (NYSE: ETE) has made a move to buy Williams Companies (NYSE:WMB), offering upwards of $53.1 billion, roughly $64 a share. However, Williams has called this bid too low.

Williams Companies is still attractive to Energy Transfer Equity, where not only would it create an industry giant, but Williams Companies has a strong presence in the Northeast that would complement Energy Transfer Equity’s assets in the Midwest.

Energy Transfer Equity noted that it’s been trying to engage with Williams Companies for at least six months. With that, there could be more players interested. Williams Companies launched its own strategic review to decide whether to sell itself.

What’s more, other larger players could find Williams Companies interesting, such as Enterprise Products Partners (NYSE: EPD), Kinder Morgan (NYSE: KMI) or TransCanada (NYSE: TRP). And if they don’t find Williams Companies interesting, they could find that other major players are worth buying.

This buyout offer is just the latest for what’s becoming an interesting environment for pipelines. Recall that earlier this year, Williams Companies announced it would consolidate its structure by buying up Williams Partners (NYSE: WPZ). One key to the Williams Companies-Energy Transfer deal would be that Williams Companies drop its pursuit of its MLP.

Bigger is better in the MLP industry, so we could see an additional wave of consolidation as major players look to expand their geographical reach and scale. This is becoming more and more important, as building new pipelines in the U.S. is becoming increasingly difficult.

With that, here are three other prime candidates for buyouts in the midstream business:

Buyout Target No. 1: Oneok Inc. (NYSE: OKE)

First up is Oneok, which is a major player in the natural gas pipeline business. Last month we called out two companies that could be prime candidates for reconsolidation, which includes buying up their MLPs. Oneok was one of them, where it could roll up its MLP, Oneok Partners (NYSE: OKS). But now it could be a major buyout target, which means the company has a dual catalyst of sorts.

Oneok is enticing since it’s a pure play general partner of Oneok Partners, which comes after spinning off its regulated utility business last year. The real appeal to a buyer, however, could be Oneok’s entrenched system of gathering and processing natural gas liquids. Basically, its gathering, processing and pipeline businesses are all interconnected, which allows Oneok to enjoy speed and low-costs when it comes to moving NGLs.

Buyout Target No. 2: Targa Resources Corp (NYSE: TRGP)

Targa Resources Corp is the general partner of Targa Resources Partners (NYSE: NGLS). It makes its money via processing and transporting natural gas. The appeal to Targa is its potential for expansion, which is a focus at the company. With a $5.2 billion market cap, it’s a bit easier to swallow.

The big appeal for Targa is its recent deal for Atlas Energy, which is expected to generate $1 billion in organic projects over the next couple years, driving cash available for distribution higher over the interim. Targa already has a strong presence in the Permian basin, but with Atlas’ assets it’s a much more enticing target — where it now has exposure to the Mississippi Lime and Woodford basins.

Buyout Target No. 3: Markwest Energy Partners (NYSE: MWE)

Markwest is third on the list, with a close to $12 billion market cap, it’s quite the prize. It’s very enticing, with a strong position in the Marcellus shale and plans to tap into the Utica shale. With this new focus on the shale plays, Markwest expects its fee revenues (read: steady revenues not tied to oil or gas prices) to go from about 40% of total revenues to 70%.

It merged with its general partner some seven years ago, so it’s not a re-consolidation story, yet, being one of the few MLPs that pay out 100% of its distributions to common unit holders, it’s still attractive. From a buyout standpoint, the shift toward steady fee revenues is a positive, where back in 2008, only about a quarter of its revenues were fee-based.

In the end, there are a couple of opportunities to see value created in the MLP space. One being a potential buyout and the other being the fact that others can pursue a re-consolidation and the other being outright buyouts. Williams Companies will likely attract the interest of other major players, potentially leading to a bidding war. This would be the largest energy deal of the year and likely fuel other players in the industry to look into consolidating. Pipelines have long been hailed as the boring, yet safe, investments in the oil business. But the industry is heating up, with more to come.