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Hess Infrastructure Partners Closes USD 225m Acquisition of Hess Bakken Water Business.

M2 EQUITYBITES-March 11, 2019-Hess Infrastructure Partners Closes USD 225m Acquisition of Hess Bakken Water Business

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11 March 2019 - Texas-based Hess Infrastructure Partners LP (HIP), a midstream energy joint venture between Hess Corp. (NYSE: HES) and Global Infrastructure Partners (GIP) and the Hess Midstream Partners LP sponsor, have closed the acquisition of Hess' Bakken water services business for USD 225m, the company said.

The Partnership has provided Hess Midstream a right of first offer to acquire the water services business in the event the Partnership decides to sell the water services business in the future.

The scope of the water services business includes substantially all of Hess' Bakken produced water gathering assets and saltwater disposal services in North Dakota, which currently consist of over 150 miles of existing Hess water gathering pipelines capturing approximately 30,000 barrels per day of produced water.

The water services business is supported by a long-term contract that includes minimum volume commitments for both produced water gathering and disposal services, and annual tariff rate recalculations for the produced water gathering services.

In addition, on February 26, 2019, HIP announced an agreement to acquire approximately 75 miles of produced water gathering pipelines from Summit Midstream Partners.

This acquisition will be incorporated into HIP's existing long-term water contract and is expected to close in 1Q19.

HIP said the expected growth in produced water volumes over the next several years and underdeveloped basin infrastructure creates an attractive opportunity for continued investment to build additional infrastructure for Hess and third parties.

The scope of the water services business includes substantially all of Hess' Bakken produced water gathering assets and saltwater disposal services in North Dakota, which currently consist of over 150 miles of existing Hess water gathering pipelines capturing about 24,000 barrels per day of produced water.

Hess Infrastructure Partners LP owns interests in various operating companies that provide a diverse mix of midstream oil and natural gas services in the core of the Bakken and Three Forks shale plays in the Williston Basin area of North Dakota. The partnership also owns a 100% interest in the general partner of 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.

The company's assets are primarily located in the Bakken and Three Forks Shale plays in the Williston Basin area of North Dakota.

Hess Corp. is a global independent energy company engaged in the exploration and production of crude oil and natural gas.

Global Infrastructure Partners is an independent infrastructure fund that invests in infrastructure assets and businesses across three core sectors: energy, transportation and water/waste.

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Publication:M2 EquityBites (EQB)
Date:Mar 11, 2019
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