Oil 101: Introduction to Oil and Gas - Midstream
Oil 101: Introduction to Oil and Gas - Midstream What is Midstream? This Midstream content is derived from our Oil 101 Midstream ebook and can be found in our oil and gas learning community. This Midstream module includes the following sections (use the links below for quick access): Midstream Business Characteristics Midstream Participants Processing – The Next Step in Adding Value Transportation Storage Midstream - As its name implies, the midstream segment encompasses facilities and processes that sit between the upstream and downstream segments. Activities can include processing, storage and transportation of crude oil and natural gas. In most cases, oil and gas reserves are not located in the same geographic location as refining assets and major consumption regions. Transportation is a big part of midstream activities and can include using pipelines, trucking fleets, tanker ships, and rail cars. The midstream segment is separated from upstream and downstream in most oil companies because it is considered a low risk, regulated type of business. It does not fit the risk profile or asset complexity of the other segments of the oil and gas industry. Success in the midstream segment depends on many external forces including: -Upstream operations continuous delivery of reserves -Refinery margins that encourage refined product production -Health of the downstream, natural gas, and petrochemical industry markets. -Natural gas price levels that impact the attractiveness of NGL’s as feedstock -Political sentiment for pipeline expansion and “not in my backyard” hurdles While the midstream gathering and processing sector is relatively free of commercial regulation, the movement of gas by interstate pipelines and subsequent state level distribution activities are highly regulated in the US by the Federal Energy Regulatory Commission (FERC).
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Oil 101: Introduction to Oil and Gas - Midstream
- 1. EKTINTERACTIVE.COM Oil 101: Introduction to Oil and Gas What is Midstream?
- 2. EKTINTERACTIVE.COM What is Midstream? This Midstream module includes the following sections: Introduction to Midstream Midstream Business Characteristics Midstream Participants Processing – The Next Step in Adding Value Transportation Storage
- 3. EKTINTERACTIVE.COM Midstream As its name implies, the midstream segment encompasses facilities and processes that sit between the upstream and downstream segments.
- 4. EKTINTERACTIVE.COM Midstream Activities Activities can include processing, storage and transportation of crude oil and natural gas.
- 6. EKTINTERACTIVE.COM In most cases, oil and gas reserves are not located in the same geographic location as refining assets and major consumption regions.
- 7. EKTINTERACTIVE.COM Characteristics of the Midstream Segment
- 8. EKTINTERACTIVE.COM Low Risk The midstream segment is separated from upstream and downstream in most oil companies because it is considered a low risk, regulated type of business. It does not fit the risk profile or asset complexity of the other segments of the oil and gas industry.
- 9. EKTINTERACTIVE.COM Highly Regulated The movement of gas by interstate pipelines and subsequent state level distribution activities are highly regulated in the US by the Federal Energy Regulatory Commission (FERC).
- 11. EKTINTERACTIVE.COM Processing Processing oil and gas liquids into marketable products is the beginning of the midstream segment of the business.
- 12. EKTINTERACTIVE.COM Field Processing Field processing is the first phase of oil and gas processing, starting in the onshore or offshore production field.
- 13. EKTINTERACTIVE.COM Field Processing Here, surface facilities are designed and installed that: Measure the production rate, Separate the oil, gas, and water, Remove impurities, Temporarily store the crude or gas.
- 14. EKTINTERACTIVE.COM Fractionation Fractionation plants, which remove natural gas liquids (NGL) from the produced oil and gas are also a component of the midstream activities. These NGLs are used as blend components in a refinery and used as fuel or feedstock in the manufacture of petrochemicals.
- 16. EKTINTERACTIVE.COM Transportation After field processing, treated oil and gas is delivered via a complex transportation, transmission and distribution infrastructure.
- 17. EKTINTERACTIVE.COM Pipelines Crude and refined liquids start their journey in a spider web of small-diameter field gathering pipelines.
- 18. EKTINTERACTIVE.COM Marine Transportation Once accumulated, larger volumes are transported internationally in tankers or vessels and moved along the coast or through rivers in smaller barges.
- 19. EKTINTERACTIVE.COM Land Transportation Land transportation methods include pipelines, truck and rail.
- 20. EKTINTERACTIVE.COM Natural Gas Transportation Natural gas, which flows at much higher pressure than crude oil, is most often transported in large-diameter pipelines called transmission lines.
- 21. EKTINTERACTIVE.COM Pipelines, Trucks, and Railroad While pipelines are the safest and most efficient way to transport oil and gas, trucks and rail are more flexible in terms of timing and destination.
- 22. EKTINTERACTIVE.COM Crude by Rail The recent growth in domestic US production has led to an expansion of crude-by-rail shipments since many new fields are not connected to existing pipeline infrastructure.
- 23. EKTINTERACTIVE.COM NGL vs LNG NGL is an acronym for Natural Gas Liquids – the liquid hydrocarbons normally associated with natural gas.
- 24. EKTINTERACTIVE.COM The most common NGLs are methane, ethane, propane, butane.
- 25. EKTINTERACTIVE.COM NGLs NGLs are much more valuable as raw material for further processing than as fuel for simple combustion.
- 26. EKTINTERACTIVE.COM LNG - Liquefied Natural Gas LNG is an acronym for Liquefied Natural Gas – the gaseous portion of natural gas (mostly the methane and a little ethane) in the liquefied state.
- 27. EKTINTERACTIVE.COM LNG - Liquefied Natural Gas LNG is an efficient way to move, transport and handle large quantities of natural gas.
- 29. EKTINTERACTIVE.COM Storage - Crude Oil Storage facilities for crude oil and refined liquids include: bulk terminals, refinery tanks, holding tanks.
- 30. EKTINTERACTIVE.COM Strategic Petroleum Reserve The Strategic Petroleum Reserve (SPR) is an emergency storage of oil maintained by the US Department of Energy.
- 31. EKTINTERACTIVE.COM Strategic Petroleum Reserve Current storage capacity is approximately 727 million barrels, with about 695 million barrels (or 36 days consumption) in inventory.
- 32. EKTINTERACTIVE.COM Strategic Petroleum Reserve The SPR was started in 1975 as a result of the oil embargo of 1973-74.
- 33. EKTINTERACTIVE.COM Storage - Natural Gas Because of its extremely high pressure, natural gas must be stored in underground reservoirs until it is ready to be transported to market.
- 34. EKTINTERACTIVE.COM Storage - Natural Gas Most commonly depleted gas reservoirs are used, with salt caverns and aquifers being other storage possibilities.
- 35. EKTINTERACTIVE.COM Introduction to Oil and Gas This Midstream material was taken from our Introduction to Oil and Gas course.
- 36. EKTINTERACTIVE.COM Who are we? EKT Interactive has been a leading oil and gas training company since 1986. Visit us at www.ektinteractive.com to learn more.