Hess Midstream Partners Announces Strategic Joint Venture to Build New Gas Processing Plant in North Dakota
Hess Midstream Partners LP (NYSE:HESM) (“Hess Midstream”) announced today the formation of a 50/50 joint venture with Targa
Resources Corp. (NYSE:TRGP) (“Targa”) to construct a new 200 million standard cubic feet per day gas processing plant called Little
Missouri Four (“LM4”). The new gas plant will be located at Targa’s existing Little Missouri facility, south of the Missouri River
in McKenzie County, North Dakota.
Targa will manage the construction of LM4 and will operate the plant. Hess Midstream’s 50 percent interest in the joint venture
will be held through Hess TGP Operations LP, in which Hess Midstream owns a 20 percent controlling economic interest, and Hess
Infrastructure Partners LP (“HIP”) owns the remaining 80 percent economic interest. LM4 is expected to be completed in the fourth
quarter of 2018.
John Gatling, Chief Operating Officer of Hess Midstream said, “The Little Missouri Four Gas Processing Plant demonstrates our
commitment to executing our strategy by providing additional Bakken basin processing capacity, which provides another layer of
organic growth to meet our long-term targeted annual distribution per unit growth. By executing infrastructure projects that
provide more optionality to producers, Hess Midstream expects to continue to capture additional Hess and third-party volumes,
reinforcing the competitive advantage we enjoy from our strategically located infrastructure in the core of the Bakken."
Doug Burgum, Governor of North Dakota said, “We are thrilled to welcome Hess’ significant investment, which underscores the
company’s longstanding presence in North Dakota and commitment to our state. This processing plant will provide much-needed
capacity at a time when North Dakota’s oil production nears record levels and associated natural gas production continues to climb.
It’s a huge step in the right direction toward continuing to meet our flaring reduction goals and encouraging responsible energy
development and infrastructure investment.”
Jonathan Stein, Hess Midstream’s Chief Financial Officer said, “The joint venture with Targa and related investments are
expected to be fully integrated into our existing contract structure. This reinforces the competitive advantage we have through our
long-term contracts with Hess Corporation, which are 100 percent fee-based and designed to deliver stable and growing cash flows
while providing downside protection. This strategic investment is expected to continue to enhance Hess Midstream’s organic growth
trajectory with limited use of our balance sheet, while further increasing our dropdown timing flexibility.”
Construction costs for LM4 are anticipated to be approximately $150 million (gross to the joint venture), with $15 million
attributable to Hess Midstream ($60 million funded by HIP). In addition, Hess Midstream and HIP will also invest approximately $100
million gross, $20 million attributable to Hess Midstream, for new pipeline infrastructure to gather volumes to the LM4 plant.
With these investments, Hess Midstream will have total processing capacity of 350 million standard cubic feet per day of gas in
the Bakken, with export optionality north and south of the Missouri river. Hess Midstream retains the option to further expand
processing capacity by de-bottlenecking the Tioga Gas Plant in the future and, as a result, the previously planned turnaround
at the Tioga Gas Plant in 2019 is expected to be deferred.
About Hess Midstream
Hess Midstream Partners LP is a fee-based, growth-oriented, traditional master limited partnership that was formed to own,
operate, develop and acquire a diverse set of midstream assets to provide services to Hess and third-party customers. Hess
Midstream’s assets are primarily located in the Bakken and Three Forks Shale plays in the Williston Basin area of North Dakota.
More information is available at www.hessmidstream.com.
Forward Looking Statements
This press release may include forward-looking statements within the meaning of the federal securities laws. Generally, the
words “anticipate,” “estimate,” “expect,” “forecast,” “guidance,” “could,” “may,” “should,” “believe, ”“intend,” “project,” “plan,”
“predict,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature.
Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from
historical results and current projections or expectations. When considering these forward-looking statements, you should keep in
mind the risk factors and other cautionary statements in Hess Midstream’s prospectus dated April 4, 2017 and other SEC filings.
Hess Midstream undertakes no obligation and does not intend to update these forward-looking statements to reflect events or
circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
Hess Midstream Investor Relations
Jennifer Gordon, (212) 536-8244
or
Media
Sard Verbinnen & Co
Patrick Scanlon, (212) 687-8080
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