Hess Midstream, Targa to build new LM4 gas processing plant in North Dakota

LM4 gas processing plant : Hess Midstream Partners has formed a 50-50 joint venture with Targa Resources to build a $150 million gas processing plant in North Dakota named as Little Missouri Four (LM4).

The new US gas processing plant will have a capacity of 200 million standard cubic feet per day and will be located at the existing Little Missouri facility of Targa, south of the Missouri River in McKenzie County.

Targa Resources will handle the construction of the Little Missouri Four gas processing plant and will also be its operator. The new gas processing facility is slated to be ready in the fourth quarter of this year.

Hess Midstream’s stake of 50% in the joint venture will be held through Hess TGP Operations in which it owns a stake of 20% while Hess Infrastructure Partners (HIP) owns the remaining stake of 80%.

Hess Midstream and HIP will also invest around $100 million to build new pipeline infrastructure to gather volumes to the LM4 gas processing facility.

Hess Midstream Partners logo. Photo courtesy of Hess Midstream Partners/Business Wire, Inc.

Doug Burgum – North Dakota Governor, commenting on the new LM4 gas processing plant, 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.”

Through the investments, Hess Midstream will increase its total processing capacity in the Bakken Basin to 350 million standard cubic feet per day of gas, with options to export it north and south of the Missouri river.

Commenting on the new Little Missouri Four gas processing plant, 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.”

As per the terms of the joint venture, Hess Midstream will have an option to expand processing capacity of the LM4 gas processing plant further by de-bottlenecking the Tioga Gas Plant in the future. Hess Midstream says that due to this, a previously planned turnaround at the Tioga Gas Plant slated to be done next year is likely to be postponed.

Jonathan Stein – Chief Financial Officer of Hess Midstream, commenting on the LM4 gas processing plant, 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.”