Oil & Gas Pipeline, Storage & Refining (7.6) · Industry Index

Overview

Oil & Gas Pipeline, Storage & Refining is the midstream and downstream of the energy value chain: the pipelines, storage, processing, LNG terminals, refineries, and distribution that move, transform, and deliver oil and gas after extraction. Headline revenue is enormous (~$2.9 trillion in 2022), but it is dominated by the pass-through commodity value of refined products and wholesale fuel; the fee-based midstream infrastructure (pipelines, storage) is a smaller, more stable business.

Midstream pipelines and terminals are toll-like, recurring-revenue infrastructure prized by investors, while refining and fuel distribution are commodity- and price-driven with thin margins (2022 figures are heavily inflated by high oil and fuel prices). The transformational growth story is LNG export, alongside midstream consolidation and petrochemical integration on cheap shale-gas feedstock. The U.S. has become the world's largest LNG exporter, with a massive Gulf Coast build-out.

Market snapshot

Growth: ~10.7%CAGR (2017–22, nominal)
Companies: ~6,536 firms

Firms by employee count

59.4% of firms have fewer than 20 employees: 3,878 micro-businesses, below most mandates.

The investable universe2,652 firms with 20+ employees

20–99: 1,42954%
100–499: 63924%
500+: 58422%

Percentages are of the 20+ employee universe. 20–99 and 100–499 are the lower-middle market; 500+ is at scale.

No aggregate is shown, deliberately. The same barrel is counted when it leaves the refinery and again when it is wholesaled, so adding these segments would roughly double the real market. The summed figure exceeds three trillion dollars against a US petroleum market well under half that. The segment figures below are sound; their total is not.

NAICS 237120, 324110, 324121, 324122, 324199, 325110, 424710, 424720, 457210, 486110, 486210, 486910, 486990. U.S. Census Bureau, 2022 Statistics of U.S. Businesses; U.S. Census Bureau, 2022 Economic Census.

Business model & economics

Revenue model

Pipeline/storage fees, refining margins, and fuel distribution

Key economics

Revenue per firm: $463,593,613
Employees per firm: 64.0
Recurring revenue: Mixed
EBITDA margin: Stable midstream; thin commodity refining/distribution
Capex intensity: High

Characteristics

Scale-driven: payroll is only 1% of revenue, so the cost base is assets, not headcount
Deep strategic-buyer pool: 584 firms exceed 500 employees, so a scaled asset has trade buyers
Fee-based midstream infrastructure vs. commodity downstream.
Headline revenue dominated by pass-through fuel value.
LNG export the transformational growth story.

NAICS 237120, 324110, 324121, 324122, 324199, 325110, 424710, 424720, 457210, 486110, 486210, 486910, 486990. U.S. Census Bureau, 2022 Statistics of U.S. Businesses; U.S. Census Bureau, 2022 Economic Census.

Geographic concentration

Wyoming, North Dakota and Louisiana. The midstream map follows the pipe, which runs from the producing basins to the Gulf. These are gathering and processing states, not consuming ones.

WyomingNorth DakotaLouisiana

U.S. Census Bureau, 2022 Statistics of U.S. Businesses (firms by state), NAICS 237120/324110/324121/324122/324199/325110/424710/424720/457210/486110/486210/486910/486990. Concentration shown by location quotient.

M&A deal context

Deal activityHigh

Who’s acquiring

Midstream/MLP & pipeline companies
Infrastructure funds & investors
Refining & integrated-energy majors

What’s driving deals

LNG-export build-out and capacity.
Midstream/MLP consolidation.
Pipeline/terminal infrastructure investment.

Oil & Gas Pipeline, Storage & Refining