Hess Midstream Partners LP (NYSE:HESM) (“Hess Midstream”), today announced that its subsidiary, Hess North Dakota Pipelines LLC entered into an agreement to purchase the crude oil and gas gathering assets of Summit Midstream Partners’ Tioga Gathering System (the “Tioga System”) for cash consideration of approximately $60 million gross, or approximately $12 million net to Hess Midstream, with the potential for an additional $7 million of gross contingent payments in future periods subject to certain future performance metrics.
Image: Hess Midstream Partners announces agreement to acquire Tioga Gathering System. Photo: courtesy of bejim/FreeDigitalPhotos.net.
In addition, Hess Midstream’s sponsor, Hess Infrastructure Partners LP (“HIP”), separately agreed to acquire the water gathering assets of the Tioga System from Summit Midstream Partners. Hess Midstream expects that HIP will offer it a right of first offer to acquire the water assets in the event HIP decides to sell the assets in the future. The acquisition is expected to close in the first quarter of 2019, subject to customary closing conditions.
“We are excited to extend our infrastructure footprint with the agreement to purchase the Tioga System’s crude oil and gas gathering assets,” said John Gatling, Chief Operating Officer. “This bolt-on acquisition leverages our leading contract structure to create value through a competitive acquisition multiple over time for the investment and provides opportunity to expand our midstream services offering.”
The Tioga System, located in Williams County in western North Dakota, is complementary to Hess Midstream’s infrastructure, and is currently delivering volumes into Hess Midstream’s gathering system. The crude oil and gas gathering assets include approximately 73 miles of crude pipelines and 79 miles of gas pipelines. The water assets to be acquired by HIP include approximately 75 miles of produced water gathering pipelines.
Source: Company Press Release