“Downstream” covers all the chain of transformations of the oil or gas after the transportation (Midstream). It begins with the refining and it continues with all the cracking operations of the petrochemical industry to produce all the chain of chemical products (Ethylene, Polyethylene, Propylene, Polypropylene, etc…)
Comments: By comparison with the “Upstream” (Exploration & Production) and “Midstream” (Transportation), the “Downstream” activities require as many processes as many chemical products. Most of the time these processes refer to multiple licenses owned by different companies. The consequence is to make the “Downstream” projects much more complex because of the number of players to be involved. That is the reason why these projects are therefore called “Petrochemical complex“. If the “Upstream” investments are always moving ahead toward more and more extreme and remote locations, the “ Downstream” market is all upside down where Europe is suffering from over capacity and very low profitability, while Middle East and Asia are investing heavily either to reduce their dependency to the barrel prices fluctuation, either to meet the demand from the emerging countries in benefiting from the low costs of the feed stock. Even in USA, the “Downstream” activity is turning up again to align refineries on coming environmental standards and in the chemical industry to enjoy the cheapness and sustainability of the shale gas. So depending where you stand the vision of the “Downstream” market may look very dark or very bright.
But with China being in continuous trading deficit of petrochemical products until 2030 at least, the “Downstream” market should stay on high levels of capital expenditures.