United Kingdom Oil And Gas Midstream Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

United Kingdom Oil And Gas Midstream Market Trends and Insights

Transportation Sector to Witness Growth

• The United Kingdom has an extensive network of pipelines that carry oil extracted from North Sea platforms to coastal terminals in Scotland and in northern England.
• In 2018, natural gas imported by The United Kingdom in the form of LNG was 7.3 billion cubic meters (bcm), and the natural gas pipeline was to 42.8 bcm, this is an increase with respect to LNG imported, in 2017. Primarily due to the increasing demand for gas in the country.
• Consumption of natural gas increased in the country, by 2.3%, year on year, to 67.8 mtoe, in 2018 from 61.9 million tons of oil equivalent (mtoe), in 2015. Oil consumption in the United Kingdom has increased by 0.56 %, year on year, rising to 77.0, in 2018 from 75.3, in 2015. Increasing consumption is indicative of increasing economic growth of the country
• In 2018, Bacton-Zeebrugge Interconnector and Langeled Pipeline are the most significant operational gas pipelines in the country with 74 cubic meters and 72 cubic meters of max flow capacity, respectively.
• The United Kingdom's pipeline capacity is expected to grow slightly in the forecast period due to an increase in oil production in the country and increase in demand for oil and natural gas.

Increasing OIl Production to Drive the Market

• The United Kingdom depends on oil and gas supply prominently from its resources in the North Sea and Neighbouring countries like Norway. In 2019, most of the pipelines that the United Kingdom imports from are linked with the oil and gas fields in the North Sea.
• Oil production in the United Kingdom increased substantially, by 9.0%, to 50.8, in 2018 from 46.6, in 2017.
• In 2018, crude stocks and product stocks account for around 14.5 million tons of storage in the United Kingdom. The oil is stored in many places, including terminals and refineries.
• In 2018, Forties Oil and Gas Pipeline System (FPS) is currently under construction for an increase in distribution safety and reliability. The pipeline transports around 600,000 barrels of oil per day, which accounts for about 40% of the UK's production of oil.
• Hence, increasing the production of oil is expected to increase the growth of the sector in the forecast period.

Regulatory Landscape

The United Kingdom oil and gas midstream regulatory environment is split across offshore and onshore regimes. The North Sea Transition Authority (NSTA) administers licensing and consents for upstream activity and associated offshore infrastructure, including Pipeline Works Authorisations (PWAs) under the Petroleum Act 1998 for offshore oil and gas pipelines (and also for hydrogen and carbon dioxide pipelines). Environmental regulation for offshore developments is handled through a separate consenting track led by the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED), which adds a distinct compliance layer for terminals and pipelines tied to offshore projects.

On the gas transmission and downstream side, Ofgem regulates licensed gas transportation under the Gas Act 1986, with the Uniform Network Code (UNC) providing the core commercial framework for capacity, entry/exit arrangements, and balancing interfaces. In April 2025, Ofgem issued a statutory consultation to modify special conditions in the National Transmission System Gas Transporter Licence, covering capacity reservation and incremental entry and exit capacity obligations, indicating active refinement in how capacity is planned and allocated. Policy for repurposed gas assets and new molecules is also progressing, with DESNZ leading the hydrogen economic regulatory framework work for pipeline networks, while signaling continuity with existing gas licensing constructs and hydrogen-specific code arrangements.

Value Chain Analysis

The United Kingdom oil and gas midstream value chain starts with offshore production in the North Sea (including West of Shetland), where hydrocarbons move through offshore gathering systems and export pipelines into coastal reception points. Flows then concentrate through entry terminals and processing hubs such as St Fergus and Bacton, alongside LNG import infrastructure (including Isle of Grain and Milford Haven) that supplements pipeline imports and influences seasonal and security-of-supply use of the transmission network. Gas is then transported through the National Transmission System operated by National Gas Transmission, which comprises around 7,630 km of pipelines, before being delivered to distribution networks, power generators, large industrial users, and interconnectors supporting cross-border trade.

Supporting activities include storage (notably salt cavern and other storage assets), integrity management, metering, compression, and terminal operations, alongside services and fabrication activity clustered in established industrial hubs. UK-based supply chain participants include fabrication and service providers such as Global Energy Group (Port of Nigg), Maraen, and other North Sea-focused contractors that support maintenance, brownfield modifications, and equipment packages for terminals and pipeline systems. Consenting and planning gates for new or modified infrastructure, including PWAs offshore and planning thresholds for nationally significant pipeline and storage projects, can shift investment toward tie-ins and upgrades of existing corridors rather than greenfield systems.

Market Opportunities and Future Outlook

Operational flexibility and resilience investments around existing terminals, interconnectors, and storage assets are a primary opportunity set as the gas system adapts to changing supply patterns. DESNZs June 2025 Midstream Gas System Update to the Market frames the need to address infrastructure challenges during the gas transition, while Ofgems April 2025 statutory consultation on the Gas Transporter licence highlights that capacity reservation and incremental capacity obligations remain active policy levers for network access and reinforcement. The Planning Act 2008 also defines thresholds for nationally significant gas infrastructure, including underground storage (43 million standard cubic metres capacity or 4.5 million standard cubic metres per day flow rate), which creates clearer pathways for scale projects when commercial cases are supported.

Hydrogen and wider energy-system planning also create near-term whitespace for midstream owners and service providers through repurposing and hybrid-use concepts. DESNZ has been developing the hydrogen economic regulatory framework for pipeline networks, using an approach that retains familiar gas licensing constructs while building hydrogen-specific arrangements, which supports early-stage investment decisions for hydrogen-ready assets such as storage and pipelines. System-planning reforms add additional signals, including movement toward a Gas Network Capability Needs Report under the National Energy System Operator and government work on strategic spatial energy planning, both of which increase emphasis on coordinated siting and network readiness. Evidence of shifting priorities also shows up in industry-led risk identification, with Offshore Energies UK (February 2026) highlighting early-closure risks for major pipeline infrastructure and processing terminals such as the Shetland Gas Plant and FUKA terminal, reinforcing the commercial importance of life-extension, integrity, and repurposing programs to keep connected fields and import routes viable.