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Tuesday, September 13, 2011

What are downstream, upstream and mid stream companies?

Upstream companies
In oil and natural gas industry, upstream companies are companies are involved in exploration and production of crude oil and natural gases. These companies explore underground and underwater crude oil & gas fields and do the drilling to bring the crude oil & natural gases out. Some Major upstream companies (randomly picked) are BP, ExxonMobil, and Shell Gas.
ONGC, Oil India is some Indian names to take.
Downstream companies
Downstream companies get Crude oil from upstream companies and do the refining process.
The products derived from crude oil are gasoline (petrol), LPG (liquefied petroleum gas), diesel etc. Oil refineries, petrochemical plants all belong to the downstream companies. IOL, HPCL, BPCL are Indian downstream companies.
Many companies are involved in both upstream and downstream activities.
Midstream companies
Midstream companies mainly do the storage and transportation of the natural gas and crude oil. Midstream companies act as the bridge between upstream companies and the downstream companies or the end-user.
The major functions of midstream companies are gas gathering & processing, gas transportation through pipelines and fractionation. A company like Kinder Morgan operates in midstream sector.
Many functions of midstream and downstream companies overlap each other.

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