In its simplest terms the midstream industry can be described as the process which involves the shipping and storage of the oil and processing and handling of the gas from production facilities. Midstream is all about taking the crude oil and gas retrieved in the upstream sector and getting it to the downstream processing facilities via pipelines, trucking, barging and rail car. 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. 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. After the initial pipeline transfer of the oil, additional transportation and storage may be necessary before the oil is ready to be processed and distributed in the downstream sector of the industry. Trucking – The oil may be trucked over highways and roads to various facilities and processing plants. One advantage of trucking is that it allows the oil to travel to nearly any destination even if there is not a port or rail line nearby. Barge – Often the oil will be transported by barge or other seafaring vessel. This can be a very time consuming process, but it is the most efficient way for the oil to travel over oceans and other large bodies of water. Rail – Oil is often transferred over land by rail providing a cost effective and efficient option of transporting a large amount of oil quickly.
Due to the highly varied ways in which the oil is transported as well as the many different challenges it faces during its journey, there are many different business sectors involved in the midstream phase. These companies provide the services and materials which make the midstream transportation and storage possible.