Midstream: Pipelines, LNG and Storage

Midstream is the part of the energy business that moves and stores molecules: gathering lines from wells, long-distance pipelines for crude, products and gas, storage caverns and tank farms, processing plants that strip liquids from gas, and the liquefied-natural-gas (LNG) chain that turns gas into a seaborne commodity. Its economic model is the toll road: earn a fee per unit moved or stored, preferably under long-term contracts that pay whether or not the capacity is used, so that the owner is paid for access rather than exposed to the commodity price. Done well, it is the most bond-like business in energy; done badly — financed with too much debt, or built on volume rather than contracts — it is a leveraged bet on the cycle, as the US master-limited-partnership (MLP) crash of 2014–16 and Kinder Morgan's ~75% dividend cut of December 2015 showed. Midstream is also where route to market is created or destroyed: stranded gas is worthless until a pipeline or LNG plant reaches it, and the 2022 loss of Russian pipeline gas to Europe and the 2026 Hormuz closure (which stopped Qatar's LNG for months) re-priced every alternative route. US LNG export capacity has grown from zero in early 2016 to exports averaging ~17.4 bcf/d in H1 2026 (EIA), making the United States the world's largest LNG exporter, with Henry Hub gas at ~$3/MMBtu sold into markets paying many times that. This section explains pipeline economics and regulation, the MLP model and its unwinding, gas storage, the LNG chain from liquefaction to regasification, how LNG is contracted (long-term SPAs versus spot), shipping, the Henry Hub–TTF–JKM spreads, and the licence fights that decide which pipelines get built.