A midstream asset earns in two distinct ways, and understanding the split is the key to reading its economics. The first is throughput: a fee for every unit of product handled — received, stored and redelivered. The second is storage: a fee for reserving capacity, paid whether or not the capacity is fully used. Most terminals earn from both.
Throughput margin
Throughput economics are volume-driven. At its simplest, annual throughput revenue is the volume handled multiplied by the per-unit fee or margin. The throughput calculator on this site models exactly this: enter an annual volume and a per-litre margin, and it returns the annual gross margin. Because the fee is earned per unit, throughput revenue scales directly with how busy the asset is.
- Volume — the annual quantity of product moved through the asset, typically expressed in megalitres or cubic metres per year.
- Per-unit margin or fee — what the operator earns on each litre or cubic metre handled.
- Annual gross margin — volume × margin, before operating costs, financing and tax.
Storage fees and capacity
Storage economics are capacity-driven, not volume-driven. The operator is paid for the tankage it reserves for a customer, expressed as a fee per cubic metre of allocated capacity per month. This revenue is more stable than throughput because it does not depend on how much product actually flows — the customer pays for the reservation. A depot’s storage line is its annuity; its throughput line is its upside.
Take-or-pay: the stabiliser
The mechanism that makes throughput revenue bankable is the take-or-pay (or minimum throughput) commitment. The customer agrees to push a minimum volume through the terminal each year; if it falls short, it pays the throughput fee on the shortfall anyway. This converts a variable, volume-dependent revenue line into a contracted floor — which is precisely what lenders and equity investors look for. The storage & throughput agreement template implements this directly.
The calculator and the figures here are illustrative tools for sizing an opportunity, not projections of actual returns. Real economics depend on the contract terms, operating costs, financing, utilisation, currency and tax — all of which must be modelled for the specific asset.
Putting it on paper
Once the economics are sized, they are captured in documents: a storage & throughput agreement sets the storage fee, the throughput fee and the take-or-pay floor; a fuel supply agreement sets the product price and volume where the asset also trades; and a co-investment term sheet records the valuation those cash flows support. Each is a fillable template here.