Midstream Oil Operations
Candlefocus EditorA midstream operation basically begins at the wellhead, where the oil and gas is extracted from an underground reservoir or from the sea. Here, the raw crude oil and gas are then separated and treated for pipeline or tanker transport.
Midstream operations are necessary for the safe transport of oil and gas products such as crude oil, condensate, natural gas liquids (NGLs), and more. Storage tanks, loading and unloading docks, and loading and offloading terminals are just some of the elements involved in midstream operations. Nearby refinery and gas processing plants, as well as offloading terminals, allow raw materials to be transported to the plant and ultimately to the market.
One of the most visible activities of midstream operations is the use of pipelines. Pipelines are a widespread and efficient means of transporting large quantities of oil and gas to market, a safer, faster and more cost-effective solution than truck or rail transport.
In addition to pipeline transport, the storage of oil and gas products is also an important part of midstream operations, especially due to the seasonal fluctuations that petroleum product demand can sometimes experience. A reliable storage strategy helps maintain the price of oil and gas, and mitigate the risk of supply-based disruptions. For example, storage tanks can hold growing quantities of oil and gas, protecting product owner and consumers from volatile prices due to supply disruptions.
Overall, midstream operations offer a safe and efficient way to transport and store huge quantities of oil and gas products from their point of origin to their final destinations on the market. Midstream operations are also essential for mitigating risk in times of supply and demand disruptions. Companies specializing in midstream operations often enjoy a significant level of profitability, given the huge demand for their services.