Pilot performing a pipeline survey in the vicinity of Class D airspace reported an NMAC with an aircraft executing a touch and go. Reporter took evasive action to avoid a possible collision.

Narrative

Inbound from the south of ZZZ I called tower to advise that I'm going to be picking up a line over the refinery then proceed west bound. Once over the refinery I called for my west bound turn; the controller informed me of traffic on a touch and go on final and asked if I had them in sight. I did and was told to go behind that traffic. Due to spacing I asked to preform a 360 to create the space needed to do so. On the turn out I'd lost sight of the upwind traffic; at the same time the controller asked if I can descend to 1000 ft. to proceed west out of the area. I said I can and be lower than that if needed. The controller said 1000 ft. or above so I stopped at 1000 ft. It was also at this point I found the upwind target and found both of us on an intercept course with myself being above said target. I took action to pass high and behind the upwind traffic; no action was needed on the other planes part. The controller asks if there were any confusion in his instructions of maintaining 1000 ft.; and crossing mid field; I challenged the instruction of crossing midfield as that was not what I initially heard. He then asked if I was going to hold course and proceed west out of the area which I was and was told frequency change approved.