Miles to go with Midstream Supply Chain

In the Midstream Supply Chain, technology has brought about a revolution and more is yet to come. The petroleum industry has witnessed significant transformation due to major developments in the technological processes. Innovation and increased efficiency are supporting the already sophisticated techniques involved in the extraction and production of petroleum and its transportation and storage. Petroleum science is evolving every moment and the processes involved are becoming smoother with the passage of time. However, more in-depth research and development are vital for the evolution of oil and gas industry, starting from extraction and ranging to transportation, logistics, and storage.

Upstream, midstream and downstream form the core of technology available for petroleum exploration, production, and transportation. The upstream segment of the oil and gas industry comprises of all the steps from the preliminary exploration till the extraction of the resource. The midstream segment majorly involves transportation of oil and gas from the source to refineries. Depending on the source, midstream acts as an extension of either upstream or downstream.

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Midstream Supply Chain

The midstream sector successfully handles one of the most onerous logistic challenges in the world. It acts as an integral link between the upstream and downstream sectors. The oil industry continues to grow with its far-reaching impact and the massive scale of numerous products it contributes to.

The transportation of raw oil and gas must be handled with extreme care. It is a highly industrial and technical process in which the fluids need to be compressed to the required pressures for transportation through pipelines or on tankers from the resource sites. The midstream sector is instrumental in treating raw materials for the removal of impurities like water vapour or hydrogen sulphide. The process of removal of impurities and compression of fluids brings out maximisation of the quantity that has to be transported. This enhances efficiency and increases profits.

It needs to be kept in mind that the transportation of the heavier hydrocarbons which are extracted is not an easy process. The midstream modifies these chemicals at the site of production before their transportation to the refineries for processing. On the midstream platform, the natural gas is converted to liquid using indirect chemical conversion. This sector opens up a plethora of employment opportunities for the chemical engineers, business advisors, energy and gas managers, petroleum pump system operators and midstream consultants.

Midstream involves the transportation and storage of oil. The focal point is to transform crude oil retrieved in the upstream sector into myriad finished products that can be used in the daily lives of consumers. However, there are some logistic hurdles involved in the process:

• Compressor stations/Pump stations: Extreme amount of compression is required for the oil and gas to travel through long distances. It is important to employ compressor stations on the pipeline routes to maintain a regular flow.
• Geopolitical constraints: The polity and the economic situation of countries need to be kept in mind since the pipelines travel through various countries. The right paperwork, taxes, and permit pose a challenge.
• Terrain: The wide variety of geography across various countries required unique considerations for the construction and maintenance of pipelines.
• Maintenance: It is extremely crucial to prevent the pipelines from cracking or bursting. An accident can be highly expensive and devastating for the environment.

The transportation, storage, and logistics involved in the petroleum industry have an impact on the environment as well. Thus, it is crucial for companies to have a high level of awareness to help reduce the effects of pollutants that may arise as a result of miles and miles of pipeline. With the highly advanced technology available today, this has become a much more efficient process and the future prospects also look promising.

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We are looking forward to infrastructure building in 2018 in the midstream space. We shall be hearing more about investment in renewables. The core companies such as Shell, ExxonMobil, Total S.A. and Statoil have been making to the headlines this year for their considerable investments into research and development in alternative energy and the trend is most likely to continue in future.

The midstream companies have a significant presence in the global arena. Every company listed in the Platts Top 250 has made a mark for itself through outstanding performance and remarkable efforts.

Platts Rank	Company Name	Region
1	PJSC Gazprom	EMEA
2	E.ON SE	EMEA
3	Reliance Industries Ltd.	Asia/Pacific Rim
4	Korea Electric Power Corp.	Asia/Pacific Rim
5	China Petroleum and Chemical Corp.	Asia/Pacific Rim

Thus, we see that the midstream stage acts as a crucial link between the upstream and the downstream stage. It creates a valuable infrastructure for the transportation of oil cutting across large geopolitical boundaries. It is the efficiency at this stage which further determines the credibility of the global oil market.