midstream

Midstream is a term used in the oil and gas industry to describe the segment of the value chain that connects exploration and production (upstream) with refining and marketing (downstream). It encompasses the gathering, processing, storage, and transport of crude oil, natural gas, and natural gas liquids from production facilities to downstream users or markets.

Key components of midstream activity include gathering systems that collect products from wells, processing plants that remove impurities and separate components (such as natural gas processing and NGL extraction), storage facilities to balance supply with demand, and transportation infrastructure. Transportation is primarily via pipelines, which may be dedicated to crude oil, natural gas, or liquids, but can also include trucking, rail, and tanker shipping. Equipment such as compressor stations, metering and measurement systems, and LNG terminals are common in midstream operations.

Midstream companies typically own or operate the physical assets and earn revenue through fee-based arrangements, such as tariffs for pipeline throughput, processing charges, and storage fees, rather than through commodity price exposure. This makes the midstream sector relatively asset-heavy and often capital-intensive, with long-term contracts forming a core part of business models. The midstream segment serves as the critical link that moves hydrocarbons from production sites to refineries, export facilities, and end users, enabling the efficient functioning of the broader energy system.