HOUSTON--(BUSINESS WIRE)--Jan. 25, 2018--
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180125005589/en/
Source: Hess Midstream Partners LP
Hess Midstream Investor Relations
Jennifer Gordon, (212)
Sard Verbinnen & Co
Scanlon, (212) 687-8080