by Is LNG downstream or midstream? LNG is usually categorized as midstream when addressing liquefaction, transportation, and storage; however, when discussing ratification and distribution to end consumers, it is classified as downstream.
Is LNG downstream or midstream?
The various phases of the petroleum value chain—known as upstream, midstream, and downstream—each have complex protocols and distinct operating goals.
The discovery, production, transportation, storage, refining, and distribution of oil, natural gas, and their derivatives present several obstacles that these industries must tackle jointly, notwithstanding their differences.
It’s interesting to note that the phrases “upstream” and “downstream” originated outside the oil and gas sector. They were inspired by the Kanban technique, a system that was first created to improve industrial operations.
Therefore, comprehending its beginning offers important insights into how efficiency-driven concepts are reflected in the industry’s segmentation. However, do you know what the Kanban methodology is?
LNG in the Midstream Sector
An essential component of the midstream industry is LNG liquefaction facilities, which transform natural gas from upstream production into a liquid condition for simpler transportation and storage.
In the midstream sector, LNG is transported using large-scale pipelines for land-based transportation over shorter or more direct routes, as well as specialized cryogenic tankers (ships) for long-distance ocean transportation, where natural gas is cooled to roughly -162°C to become a liquid.
While pipelines link liquefaction facilities to distribution networks and end users after the LNG is regasified, LNG tankers are extremely advanced vessels built to retain the cargo’s ultra-low temperature.
LNG in the Downstream Sector
LNG is delivered by carriers to regasification plants in the downstream sector, where it is transformed back into natural gas.
For power generation, heating, and industrial purposes, these facilities—which can be onshore or floating (FSRUs)—store the super-chilled liquid in cryogenic tanks, heat it, and then send the gaseous form into the pipeline network.
Through a multistep process that includes cryogenic storage, regasification, and transportation via pipelines or specialized trucks and ships, liquefied natural gas, or LNG, is supplied to power plants, industries, and consumers.
LNG is frequently delivered to power plants and other big industrial customers via specialized facilities that convert the liquid into gas for immediate consumption.
It may be transported by trucks or smaller boats from distribution terminals to consumers and smaller industries.
The preferred fuel for transportation, heating, and energy production is liquefied natural gas (LNG), which is more flexible than other power generation options and has a smaller carbon footprint than coal.
To properly transport and store natural gas before regasifying it and distributing it to end customers, LNG is created by chilling it to a liquid condition.
In contrast to traditional marine fuels, LNG is a cleaner shipping fuel that offers a route to net-zero emissions and better air quality. It is also used in the downstream industry as a fuel for heating and electricity production.
After being received at terminals, where it is regasified and supplied to power plants, industrial facilities, and commercial or residential heating systems, LNG is then distributed to end consumers.
Midstream vs Downstream in Natural Gas – Key Differences
While downstream operations in the natural gas sector concentrate on refining the processed gas into consumer goods like gasoline, propane, and plastics, and delivering these finished goods to end users.
Midstream operations in the industry handle the processing, storage, and transportation of raw gas from the well to processing facilities.
The primary distinction is that midstream transports and stores the product, serving as a link between the upstream process of extracting raw materials and the downstream process of creating finished goods.
Where companies draw the line:
- The line separating midstream and downstream in the natural gas sector is established at the point of processing and purification, where midstream firms move raw gas from the wellhead and get it ready for refinement.
- Downstream firms then take the refined product and transform it into consumer-ready fuels and products before distributing and marketing them to final consumers.
Examples of midstream
Pipelines
- Kinder Morgan’s Permian Highway Pipeline project aims to increase infrastructure to satisfy the market’s increasing demand for natural gas.
- Raw natural gas is transported from the wellhead to processing facilities via gathering pipelines, which are smaller, low-pressure pipes.
- Transmission pipelines: These are wide-diameter pipelines, like the LEAP Gathering Lateral Pipeline, that transport saleable natural gas across great distances from producing regions to markets.
LNG export terminals
- Plaquemines LNG is a venture worldwide LNG project in Louisiana that exports liquefied natural gas all over the world by connecting to the
- Texas Eastern pipeline.
- Freeport LNG is a Texas-based plant that liquefies and processes natural gas for export to foreign markets.
- Cheniere Energy’s massive LNG export plant in Louisiana is called Sabine Pass.
- Cove Point is a Dominion Energy LNG export terminal project located in Maryland.
Examples of downstream
Petrochemicals
- The process of turning crude petroleum into products that may be used is known as refining.
- Petrochemical production is the process of converting refined goods into raw materials for other products.
- Plastics: A vast range of materials used in consumer goods, construction, and packaging.
- Tires, hoses, and other rubber goods are made from synthetic rubber.
- Chemicals that enhance agricultural output include pesticides and fertilizers.
- Waxes and lubricants are utilized in machinery and other applications.
- When building roads, asphalt is utilized.
Power Generation
- Delivering dry natural gas to power plants is known as fuel delivery.
- Production of energy: Natural gas is delivered to power plants, which use it to produce energy for end users.
Conclusion
Depending on the particular value chain segment under discussion, LNG (liquefied natural gas) can be classified as either a midstream or downstream product.
While ratification facilities and the subsequent supply of gas to end customers are downstream operations, liquefaction plants are often midstream.
With discussions on sustainability, carbon capture, biofuels, and clean hydrogen, as well as cutting-edge technologies like advanced LNG shipping, advanced control systems, and cybersecurity to improve efficiency, safety, and profitability in the downstream sector, IDCE 2025 examines downstream LNG by concentrating on its role in the energy transition and digital transformation.
By tackling obstacles and grasping fresh business prospects, the conference seeks to give industry leaders a forum for cooperation, innovation, and defining the downstream sector’s future.