Since George Mitchell cracked the code of unconventional production in the Barnett shale in Texas, the upstream, midstream and downstream sectors of the energy industry have undergone dramatic changes.

Upstream executives must balance too much gas production with the need for more natural gas liquids and oil production. Midstream players are scrambling to build out gathering, processing, transmission and storage systems to serve the overwhelming volumes of gas. And producers of the highly prized oil from the Bakken and Eagle Ford plays face limited infrastructure, and are, in some areas, forced to move barrels by trucks at fees as high as $30 per barrel to get production to market hubs, refineries and petrochemical centers.

Meanwhile, downstream operators are eyeing new sources of crude for refineries and new sources of natural gas liquids for petrochemical plants. In fact, the U.S. petrochemical industry is enjoying the current opportunity to be highly competitive in the world’s chemical market due to the newly prolific cheap source of feedstock.

Yet, moving upstream unconventional production to downstream markets is an expensive proposition, because much of the infrastructure needed to handle new volumes simply doesn’t exist, or is in the wrong place.

Recently, the Interstate Natural Gas Association of America (INGAA) forecast the need for some $200 billion to be spent on midstream natural gas infrastructure by 2030 (that’s $6 billion to $10 billion per year). Breaking down the investment, INGAA projects the need for some 28,900 to 61,600 miles of new gas transmission pipelines, about 6.6- to 11.6-million horsepower of new pipeline compression, as much as 598 billion cubic feet of new working-gas storage capacity, about 26,000 miles of new gas-gathering pipelines and nearly 38 billion cubic feet of new gas-processing capacity.

In the finance community that serves energy’s midstream sector, some $40 billion has been spent on debt, equity, mergers and acquisitions deals, all targeted toward growth, and most driven by the unconventional plays, during the first half of 2011 alone,

So, where do midstream operators go from here? Overall, the majority of operators plan to continue on their growth trajectories. In this issue, Midstream Business reviews each sector of the industry, pipelines, processing and storage, in a mid-year review, and expectations for growth continue.

For example, although gas processing did not see a major growth spurt during 2010, much new capacity is expected to come online by the end of 2011 and into 2012, and still more will be built. The same growth is expected in new pipeline gathering and transmission systems with accompanying compression and other equipment.

Conversely, the gas storage sector is experiencing a slowdown in new capacity additions, because a lot of storage capacity was built during the past few years. However, if gas demand does not increase, or if new plays produce more gas than expected, new storage could be on the drawing board.

Elsewhere, more initial public offerings and corporate buyouts are expected in the coming months as midstream companies position themselves in the production basins that best fit their corporate strategy, and jettison assets in those plays that do not fit. Also, upstream producers continue to impatiently build out gathering systems to move gas away from the wellhead, and then monetize those assets to reinvest the capital into high-return exploration and production activities.

To manage all of the new activity, midstream operators need venues to discuss issues and forge new alliances and partnerships. To serve that need, Hart Energy will hold Midstream Workshops at its upcoming Eagle Ford-focused Unconventional Gas Conference (dugeagleford.com) to be held in San Antonio on October 10 to 12 and its Marcellus –focused Developing Unconventional Gas Conference (dugeast.com) to be held in Pittsburgh on November 15 to 17.

Both play-focused workshops will feature leading midstream operators and thought-leaders who will discuss the top issues of the day and the challenges and opportunities they expect to face in the coming years. To view the agendas or register, please visit the conference websites.