Midstream Oil and Gas

The Three Oil and Gas Energy Markets: What Is Midstream?
November 26, 2017 – 03:42 am

The Three Oil and Gas Energy Markets: What Is Midstream?The oil industry is commonly categorized and identified by the three energy markets of upstream, midstream and downstream. The first phase of the industry involves locating oil fields, while the last phase involves serving up a wide variety of finished, high quality and fully processed products to consumers. Along the way there are quite a few integral steps. The upstream part of the industry involves the first phase of finding and drilling oil, the midstream phase involves shipping and storing the oil, and the downstream phase involves refining and distributing the processed oil-based products.

In this article we will discuss that all important middle step: the midstream sector. For clarity it is also important to note that some systems of classification use only the upstream and downstream sectors as their model. In systems such as this, the parts of the process traditionally considered to belong to the midstream sector are instead classified with the downstream sector. For the purposes of this piece, however, we will assume a three system model with the midstream sector as a separate, individual entity.

In its simplest terms the midstream industry can be described as the part of the process which involves the shipping and storage of the oil. Midstream is all about taking the crude oil retrieved in the upstream sector and getting it to the downstream processing facilities so that it can be turned into the various finished products in consumers’ daily lives. This may seem simple enough; however, there are quite a few logistical hurdles involved in this process which the midstream must successfully navigate. Let’s take a look at an overview of how the oil is transported.

PipelinePipeline

Piping, or the pipeline, represents the most common way that the oil begins the process of being transported and distributed. To accomplish this, vast networks of pipelines need to be constructed and maintained. There are many potential obstacles involved in the piping of oil because it typically needs to travel long distances. Some of the most common hurdles include:

Compressor Stations/Pump Stations – Getting the oil and gas to travel the long distances to the downstream refinery locations requires extreme amounts of compression. Even with high amounts of pressure the pipeline routes need compression/pump stations at intervals to keep the flow moving.

Geopolitical – Since the oil does travel so far it is not at all uncommon for it to travel through multiple countries. Thus building and maintaining the pipeline will require successfully navigating these political waters, getting the right permits and other paperwork done, keeping the pipeline in compliance with local regulations, and negotiating taxes.

Source: setxind.com
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