Upstream, Midstream, Downstream: A Quick Guide to the Natural Gas Process

Whether you work in the oil and gas industry or not, you've probably heard the terms "upstream," "midstream," and "downstream" before. But do you know what they mean?

In a nutshell, these terms describe the different stages in the natural gas process, from its exploration and production (upstream) all the way to its delivery to the end consumer (downstream).

Let's take a closer look at each stage.

Upstream

The upstream stage is known as the exploration and production, or E&P, phase. At this stage, exploration companies attempt to locate natural gas reservoirs using geological methods and seismic surveys. After a potential reservoir has been located, production companies extract gas from the ground using drill rigs and wellheads. However, extracted gas contains many impurities, like water and hydrogen sulfide, that need to be removed. This is where field processing comes in.

Production companies transport gas from wells to a processing plant through gathering lines. Once at the plant, natural gas goes through a multi-stage process that removes impurities and treats it to meet regulatory requirements. Natural gas is "pipeline quality" when it is dry, meaning it is composed of mostly methane (70-90%) and negligible amounts of other impurities.

Midstream

After field processing, gas is sent to midstream companies who either transport it to local distribution companies (LDCs) or large customers or store it in special facilities. Both transporting and storing gas are part of the midstream stage, which involves intrastate and interstate pipelines, compression stations, any vehicles that transport product, and storage facilities.

Storage facilities for natural gas include depleted reservoirs, aquifers, and salt caverns. When these storage options are unavailable, natural gas can also be liquefied and stored in a specialized facility. Since liquified natural gas (LNG) has 600 times less volume, it is more efficient to transport and store.

Downstream

Downstream is the final stage of the gas production process and includes the distribution of natural gas to the consumer. Gas ownership is transferred from the producer or pipeline company to the LDC at the city gate or the end of a particular pipeline. LDCs are responsible for delivering gas to consumers through a distribution system. These systems use pipelines called "distribution lines," which are small steel or polyethylene (PE) pipes that deliver the product to end customers, such as businesses and homes.

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