Midstream 101

The midstream industry is the link between production of natural gas, natural gas liquids (NGLs), and crude oil and the delivery of these hydrocarbon components to end-use markets. Midstream operators like WES create value at various stages along the midstream value chain by gathering production from producers at the wellhead or production facility, separating the produced hydrocarbons into various components, and delivering these components to end-use markets, and where applicable, gathering and disposing of produced water. The following diagram illustrates the primary groups of assets found along the midstream value chain:

Gathering, Stabilization, and Compression


Smaller diameter pipelines known as gathering systems directly connect to producers’ wellheads or production facilities. These pipelines transport untreated oil or gas to a central location, where it is treated and processed, if necessary. Produced water is also gathered and often accounts for the largest byproduct stream associated with onshore oil and natural gas production.


The stabilization process for natural gas separates heavier hydrocarbons from the lighter components by using a distillation process, adding heat, or by reducing the pressure and allowing the more volatile components to flash from the liquid phase to the gas phase.

The stabilization process for crude oil ensures the crude oil meets downstream vapor pressure specifications. Crude oil delivery points, like terminals, storage facilities, pipelines, and refineries, often have specific requirements for vapor pressure and temperature, and for the amount of sediment and water that can be contained in any crude oil delivered to them.


Natural gas is compressed to a desired higher pressure to enable it to be gathered more efficiently and delivered into a higher pressure system, processing plant, or pipeline. Since wells produce at progressively lower field pressures as they deplete, field compression is needed to maintain throughput across the gathering system.

Processing, Treating & Dehydration


While principal components of natural gas are methane and ethane, natural gas often contains varying amounts of heavier NGLs and contaminants, such as water and carbon dioxide, sulfur compounds, nitrogen, or helium. Natural gas is processed to remove unwanted contaminants that would interfere with pipeline transportation or use of the natural gas and to separate those hydrocarbon liquids from the gas that have higher value as NGLs. The removal and separation of individual hydrocarbons through processing is possible due to differences in molecular weight, boiling point, vapor pressure, and other physical characteristics.

Treating & Dehydration

If natural gas contains water vapor or contaminants, like carbon dioxide or hydrogen sulfide, it is dehydrated to remove the saturated water and treated to separate the carbon dioxide or hydrogen sulfide from the gas stream.


Various levels of higher pressure and lower temperature is applied through the fractionation process to separate a stream of NGLs into ethane, propane, normal butane, isobutane, and natural gasoline for end-use sale.

Storage, Transportation & Marketing

Once the raw natural gas has been treated or processed and the raw NGL mix has been fractionated into individual NGL components, the natural gas and NGL components are stored, transported, and marketed to end-use markets. Each pipeline system typically has storage capacity located throughout the pipeline network or at major market centers to better accommodate seasonal demand and daily supply-demand shifts.

Water Disposal

As a natural byproduct of crude oil and natural gas production, producers must recycle or dispose of produced water to maintain production. Disposal systems remove hydrocarbon products and other sediments from the produced water and re-inject the produced water into the ground using disposal wells. These wells are permitted and are in compliance with applicable regulations.


Midstream services, other than transportation, are usually provided under contractual arrangements that vary in terms of exposure to commodity-price risk.

Western Midstream’s primary model is fee-based. Under fee-based arrangements, WES receives a fee for each unit of 1) natural gas, NGLs, or crude oil gathered, treated, processed, and/or transported; or 2) produced water gathered and disposed of, at its facilities. As a result, the per-unit price WES receives does not vary with commodity price changes, thereby minimizing the company’s direct commodity-price risk exposure.

Educational Materials

Check out these materials for more details on the midstream business and how we keep our communities safe.