The oil and gas industry is usually divided into three major components: upstream, midstream and downstream. The midstream sector involves the transportation (by pipeline, rail, barge, oil tanker or truck), storage, and wholesale marketing of crude or refined petroleum products. Pipelines and other transport systems can be used to move crude oil from production sites to refineries and deliver the various refined products to downstream distributors. Natural gas pipeline networks aggregate gas from natural gas purification plants and deliver it to downstream customers, such as local utilities.
The midstream operations are often taken to include some elements of the upstream and downstream sectors. For example, the midstream sector may include natural gas processing plants that purify the raw natural gas as well as removing and producing elemental sulfur and natural gas liquids (NGL) as finished end-products.
(Text attributed to Wikipedia Article )
Special Benefit: Investing in Midstream Partners
Midstream firms are most often organised as Master Limited Partnerships as many Oil Producers have a share in the pipeline infrastructure to distribute their produce. Master Limited Partnerships are a hybrid legal structure only found in the US. What makes Midstream firms organised in this form so interesting from an investor standpoint is that they are required by law to distrubute all profits to their shareholders. The dividends that Midstream firms pay are very attractive and very consisent.
Midstream partners yield 7 % to 15 % on a very predicatble mostly quarterly dividend pay-out basis.
The Oil Investment report scouts the best Midstream sector stocks for you.