Upstream, midstream and downstream (petroleum industry)

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(PD) Photo: U.S. Environmental Protection Agency
Downstream sector petroleum refinery.

The terms upstream, midstream and downstream are often used to refer to the major sectors or operational components of the petroleum industry.

The upstream sector

The upstream sector involves the exploration for and extraction of petroleum crude oil and natural gas. The upstream oil sector is also known as the exploration and production (E&P) sector.

The upstream sector includes the searching for potential underground or underwater oil and gas fields, drilling of exploratory wells, and subsequently operating the wells that recover and bring the petroleum crude oil and/or raw natural gas to the surface.

The midstream sector

The midstream involves storing, marketing and transporting petroleum crude oil, natural gas, natural gas liquids (mainly ethane, propane and butane) and byproduct sulfur. Midstream operations are sometimes included in the downstream category.

The downstream sector

The downstream sector involves the refining of petroleum crude oil and the processing of raw natural gas. It includes the selling and distribution of processed natural gas and the products derived from petroleum crude oil such as liquified petroleum gas (LPG), gasoline (or petrol), jet fuel, diesel oil, other fuel oils, petroleum asphalt and petroleum coke.

The downstream sector includes petroleum refineries,[1] petroleum product distribution, retail outlets and natural gas distribution companies.

Byproduct sulfur

Petroleum crude oil is a mixture of hundreds of hydrocarbons, many of which contain sulfur that is removed during the refining of the crude oil. Raw natural gas also has sulfur-containing compounds, which are removed in processing of the raw natural gas before it is distributed to consumers. The sulfur-containing compounds removed in the refining and processing of petroleum crude oil and raw natural gas are subsequently converted into byproduct elemental sulfur. The production and marketing of the byproduct sulfur is considered to be part of the downstream sector.

The vast majority of the 64,000,000 metric tons of sulfur produced worldwide in 2005 was byproduct sulphur from refineries and natural gas processing plants.[2]

Petrochemical industry

The petrochemical industry is not generally considered to be a part of the petroleum industry. However, it is sometimes listed as a part of the downstream sector and sometimes as a fourth sector of the petroleum industry.

References

  1. Gary, J.H. and Handwerk, G.E. (1984). Petroleum Refining Technology and Economics, 2nd Edition. Marcel Dekker, Inc. ISBN 0-8247-7150-8. 
  2. Sulfur production report by the United States Geological Survey