From Extraction to Distribution: Decoding the Upstream, Midstream, and Downstream in Oil and Gas

From Extraction to Distribution: Decoding the Upstream, Midstream, and Downstream in Oil and Gas

The oil and gas industry is one of the most vital industries to the global economy. It has been estimated that more than 10 million skilled individuals throughout North America work in either the upstream, midstream, or downstream segments, with even more working in connected businesses. Each of these sectors propels the other into the production and consumption of energy, while also fueling the economy. Let’s look at the three key sectors of the industry and how they significantly impact each other.

Unleashing the Potential in Upstream

As the first step in the oil and gas supply chain, the upstream segment is the furthest away from the end-user. Exploration and production are the main work processes within this sector and refer to the initial search for hydrocarbons, the main component of petroleum and natural gas.

The search begins by venturing into unchartered territories to complete land surveying to determine if the area houses specific minerals. Exploration requires experts to analyze data and conduct seismic surveys to identify potential commercial viability. This helps to estimate the amount of oil and gas within the reserves prior to beginning the drilling processes.

Once it is determined a site has the potential to house a significant amount of resources, exploratory wells are drilled. If the wells are successful, the magic begins and extracting commences. During this process many types of production equipment are used including:

  • Glycol dehydrators
  • Heated separators
  • Gas production units
  • Indirect line heaters
  • Heater treaters
  • Heated tanks
  • Incinerators
  • Combustors
  • Flaring

The Lifeline of Oil and Gas

The midstream segment is often overlooked but very important to the overall stability of the oil and gas family. It involves the transportation, storage, and marketing of the extracted resources. This includes transporting the products from production fields, processing plants, and storage facilities to refineries and end markets.

Transportation can take place through pipelines, tankers, barges, and railcars; however, pipelines are the most common form of transportation for larger volumes of products being transported long distances. These pipelines stretch like lifelines crossing the land and linking countries together. This segment is very prevalent in the United States and Canada as there are many privately owned oil pipelines and storage facilities. One major pipeline in North America is the Keystone Pipeline System owned by one of our longtime partners, TC Energy.  It crosses through both countries and spans 2,687 miles (4,324 km).

Delivering Refined Products to the World

The final stage is downstream. In this step, crude oil and natural gas are refined, processed, and converted into products and chemicals for domestic, industrial, and transport uses. Within this segment, there is a wide range of activities that take place including:

  • Refining
  • Petrochemical production
  • Distribution,
  • Retail operations
  • Storage
  • Quality control

End-user sales of the products will then be wholesaled through business-to-business transactions, or directly through business-to-consumers transactions.

What is an Integrated Oil and Gas Company?

In most cases companies specialize in one of the oil and gas segments, but there are some larger companies who have evolved into large entities with mastery in all three segments. Profire partners with some of the largest integrated oil and gas companies including Chevron, BP, and ExxonMobil. Being an integrated company provides complete control over the various processes within each segment; improving overall efficiency and paving the way for a brighter, greener future.

Want to know how our products at Profire can provide efficiency and control within each segment? Contact Us.