Midstream

Picture crude oil discovered in the middle of nowhere, hundreds of kilometres from the nearest refinery. Someone has to physically move it there, and someone has to store it safely along the way. That connective tissue, transport and storage, is the midstream segment of the oil and gas business.

Midstream includes crude and gas pipelines, LNG tankers and terminals, and storage tanks and caverns, essentially anything that moves a hydrocarbon from where it was found to where it will be processed or sold. It earns money differently from upstream or downstream, usually through regulated tariffs for the volume that flows through a pipeline or terminal, which makes midstream a relatively steadier, less cyclical business than either end of the value chain.

GAIL is India's clearest pure midstream story, running the country's largest natural gas pipeline network, while Petronet LNG plays the equivalent role for imported liquefied gas. Both earn a fee for moving someone else's molecules, not for finding or selling them.