A world-class midstream sector enables countries to exploit the current boom in oil and gas prices
The energy sectors midstream industry can sometimes be viewed as a forgotten sibling of the more high-profile upstream and downstream sectors.
Transporting hydrocarbons is, of course, just as important to the oil and gas industry as the exploration, production and processing stages. However, it seems some producers are reluctant to invest as heavily in midstream as they would in the other sectors.
Building pipelines or investing in tanker fleets is not cheap, but looking at the major success stories of the regions energy industry, it is a world-class midstream sector that has enabled them to fully exploit the current boom in oil and gas prices.
Countries such as the UAE, Saudi Arabia and Qatar have world-class infrastructure in place and have not been shy to invest heavily in the midstream sector. Qatars huge fleet of floating pipelines the term it uses to describe its liquefied natural gas (LNG) carriers has helped it become the worlds largest LNG exporter.
Saudi Arabias extensive domestic pipeline network, coupled with its huge oil terminals and vast tanker fleet, has allowed it to raise its exports to keep the world supplied with crude.
On the other hand, Iraq is a good example of an oil producer that has been slow to spend on infrastructure. Fortunately, the Gulf state has now come to its senses and is planning a world-class pipeline network to complement its oil output.
Iraqi Kurdistan also understands the benefits of having a strong midstream sector and has been attempting to build its own infrastructure. Baghdad obviously agrees, which is why it is far less keen on Erbil emulating its midstream investment strategy.
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