Midstream petroleum is a sector of the oil and gas industry which focuses on the transportation, storage, and marketing of petroleum products. These products may be crude or refined.
The midstream industry may include natural gas processing plants that work to purify raw natural gas into a usable product. Figures on producing natural gas liquids and elemental sulfur are sometimes included as well.Service providers within the midstream petroleum industry include railroad companies, barge companies, pipeline transports, and logistics providers.
Important Midstream Petroleum Industry Statistics
#1. Since 2010, there have been over 3,300 pipeline spills documented in the United States. This includes leaks or ruptures that have spilled crude oil liquefied natural gas, and refined products. (Center for Effective Government)
#2. Over 1,000 of the pipeline incidents documented in the U.S. have involved pipelines carrying crude oil. (Center for Effective Government)
#3. Pipeline incidents in the U.S. have killed 80 people, injured almost 400 more, and created monetary damages of more than $2.8 billion. (Center for Effective Government)
#4. One of the largest spills in the midstream petroleum industry occurred in the U.S. in 2013. More than 840,000 gallons of crude oil were spilled into a North Dakota wheat field when the pipeline was struck by lightning. (Center for Effective Government)
#5. Over 40% of the pipelines that support the midstream petroleum industry in the United states are more than 50 years old. That increases the chances of corrosion affecting the integrity of the pipe, which increases its risk of failure. (Center for Effective Government)
#6. There are only 139 national inspectors in the United States. They are charged with the examination of 2.6 million miles of pipeline, or 18,000 miles of pipeline per inspector, each year. (Center for Effective Government)
#7. Kinder Morgan is the largest company in the world in terms of oil and gas transaction. Their disclosed 2014 values were $71 billion. Access Midstream Partners came in second, with $34.4 billion in revenues. (Statista)
#8. The total global transaction value of the industry declined from $390.5 billion in 2016 to $343.5 billion in 2017, representing a 13% decline in the total number of global transaction deals occurring. (Ernst and Young)
#9. Although the total number of deals was lower in 2017, the number of “megadeals” increased by 21%. A megadeal is defined as one that has a value of $1 billion or more. There were 74 megadeals finalized in 2017. (Ernst and Young)
#10. About 50% of the industry is expecting to see increased competition for assets from PE buyers within the coming year. (Ernst and Young)
#11. North American transactions within the midstream petroleum industry account for 90% of the deal market. The Top 20 deals found within the industry were all generated in the United States or Canada. (Ernst and Young)
#12. The total midstream deal value contracted to $84 billion in 2017. That figure was down 43% from the year before, reaching levels that hadn’t been seen since 2013. (Ernst and Young)
#13. Natural gas demands are highest in the Southwest than any other region, including Canada. In 2015, the total regional demand was 19.0 bcfd. (INGAA)
#14. 70% of petroleum products are shipped through pipelines in the United States. Tankers and barges are responsible for another 23% of the transportation requirements found in the industry. (Forbes)
#15. 97% of the midstream petroleum industry in Canada is based on pipeline networks for transportation. (Forbes)
#16. Two-thirds of the states in the U.S. have at least one operational refinery supporting the midstream petroleum industry. The largest refinery in the country, located in Texas, is capable of processing over 600,000 barrels of oil per day. (Forbes)
#17. Almost 400 million gallons of gasoline, delivered by the midstream petroleum industry, is consumed in the U.S. every day. Almost half (47%) of petroleum consumption in the U.S. is through some type of gasoline. (Energy Information Administration)
#18. Trains carrying crude oil products lost about 1.4 million gallons in 2013. When 2013 is compared to previous years, more oil was lost by the railroad in that year than the previous 40 years. (Natural News)
#19. Over 767 billion cubic meters of natural gas is transported by the midstream petroleum industry in the U.S. each year. Over 27 trillion cubic feet of natural gas is consumed in the United States annually. (Statista)
#20. About 5 billion barrels of crude oil is managed as a reserve by the midstream petroleum industry in the U.S. on a regular basis. (Investing Answers)
#21. One-quarter of the products supported by the midstream petroleum industry are consumed by customers in the United States, despite the country having just 4% of the total global population. (Investing Answers)
#22. More than 5 million barrels of oil per day are handled on the midstream networks of the United States. In 2018, production levels reached a sustained 10 million barrels per day for the first time in industry history. (Investing Answers)
#23. About 50% of the energy products handled by the midstream industry will be used for transportation purposes in North America. (Statista)
#24. 25% of the incidents involving pipelines and other aspects of the midstream network have occurred within the past 10 years. (PHMSA)
Midstream Petroleum Industry Trends and Analysis
The midstream petroleum industry is what gives us access to the products that we use every day. Crude oil, natural gas, and other fossil fuels give us access to the goods we use every day. From our computers and smartphones to some of the chemicals we use for cleaning, this industry transports goods for further refinement and distribution.
What the industry is struggling with right now is a centralization of services and revenues. 63% of the midstream transaction value in 2017 was through general partner interests that were corporately based. Although some entities are still willing to take on some risks of exposure, the crude oil industry is just starting to build in value once again. The build outs seen in 2014 with shale development have reached their peak.
The issue here is one of age. The midstream industry is relying upon outdated pipelines and procedures to move goods to their next destination. That is why many of the incidents experienced by the industry have occurred within the past 10 years. As these networks age, the rate of incidents will continue to increase until the infrastructure is repaired.
That’s not to say that the midstream petroleum industry will not continue to be successful. It is an industry that will be worth billions for the foreseeable future. Much of that success will be based in North America. Other midstream players will look for smaller opportunities in the other global markets as a way to build niche markets that will help to support the overall industry.