oil 101: introduction to oil and gas - midstream
TRANSCRIPT
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Oil 101:
Introduction to Oil and Gas
What is Midstream?
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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
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Midstream
As its name implies, the midstream segment encompasses
facilities and processes that sit between the upstream and
downstream segments.
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Midstream Activities
Activities can include processing, storage and
transportation of crude oil and natural gas.
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Location, Location,
Location...
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In most cases, oil and gas reserves are not located in
the same geographic location as refining assets and
major consumption regions.
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Characteristics of the Midstream Segment
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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.
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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).
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Processing
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Processing
Processing oil and gas liquids into marketable products is
the beginning of the midstream segment of the business.
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Field Processing
Field processing is the first phase of oil and gas
processing,
starting in the onshore or offshore production field.
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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.
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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.
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Transportation
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Transportation
After field processing, treated oil and gas is delivered via a
complex transportation, transmission and distribution
infrastructure.
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Pipelines
Crude and refined liquids start their journey in a spider web
of small-diameter field gathering pipelines.
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Marine Transportation
Once accumulated, larger volumes are transported
internationally in tankers or vessels and moved along the
coast or through rivers in smaller barges.
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Land Transportation
Land transportation methods include
pipelines, truck and rail.
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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.
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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.
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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.
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NGL vs LNG
NGL is an acronym for Natural Gas Liquids – the liquid
hydrocarbons normally associated with natural gas.
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The most common NGLs are
methane,
ethane,
propane,
butane.
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NGLs
NGLs are much more valuable as raw material for
further processing than as fuel for simple combustion.
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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.
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LNG - Liquefied Natural Gas
LNG is an efficient way to move, transport and handle
large quantities of natural gas.
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Storage
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Storage - Crude Oil
Storage facilities for crude oil and refined liquids
include:
bulk terminals,
refinery tanks,
holding tanks.
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Strategic Petroleum Reserve
The Strategic Petroleum Reserve (SPR) is an emergency
storage of oil maintained by the US Department of Energy.
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Strategic Petroleum Reserve
Current storage capacity is approximately 727 million
barrels, with about 695 million barrels (or 36 days
consumption) in inventory.
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Strategic Petroleum Reserve
The SPR was started in 1975
as a result of the oil embargo of 1973-74.
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Storage - Natural Gas
Because of its extremely high pressure,
natural gas must be stored in
underground reservoirsuntil it is ready to be transported to market.
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Storage - Natural Gas
Most commonly depleted gas reservoirs are used,
with salt caverns and aquifers being other
storage possibilities.
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Introduction to Oil and Gas
This Midstream material was taken from our
Introduction to Oil and Gas course.
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