USA: Gas Processing Hess Midstream and Targa Resources Form JV to Build Gas Processing Plant
Hess Midstream announced the formation of a 50/50 JV with Targa Resources to build a 5.66 million m3 per day gas processing plant in North Dakota.
Houston/USA — The new gas plant called Little Missouri Four (“LM4”) 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 % interest in the joint venture will be held through Hess TGP Operations LP, in which Hess Midstream owns a 20 % controlling economic interest, and Hess Infrastructure Partners LP (“HIP”) owns the remaining 80 % economic interest. LM4 is expected to be completed in the fourth quarter of 2018.
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 9.9 million m3 per day of gas in the Bakken, with export optionality north and south of the Missouri river. The company 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.