# Hess Midstream LP

> Clarifo company profile — qualitative business description generated from
> the company's filings. Financial statements, charts and ratios are
> available on Clarifo (https://www.clarifo.com/fi/companies/Hess Midstream LP).

## Overview

Hess Midstream LP is a fee-based midstream partnership that owns and operates gathering, processing, terminaling, storage and water-handling assets in the Bakken and Three Forks shale plays of North Dakota. It earns most of its revenue by moving and processing crude oil, natural gas, NGLs and produced water for Hess/Chevron-linked volumes and for third-party producers under long-term commercial arrangements.

## Products & services

• Crude oil gathering and terminaling
• Natural gas gathering and processing
• Produced water gathering and disposal
• NGL loading and related logistics
• Pass-through third-party transportation and service fees

- **Crude oil gathering and terminaling** (30%) — Moves crude from well sites to terminals and downstream transportation points.
- **Natural gas gathering and processing** (35%) — Collects associated gas and processes it for sale or further transport.
- **Water gathering and disposal** (15%) — Handles produced water collection, trucking support and disposal services.
- **NGL loading and logistics** (5%) — Provides NGL loading and related handling services tied to gas processing.
- **Pass-through and third-party services** (15%) — Includes reimbursable rail, trucking, electricity and other third-party fees.

- Crude oil gathering and terminaling
- Natural gas gathering and processing
- Produced water gathering and disposal
- NGL loading and related logistics
- Pass-through third-party transportation and service fees

## Customers

The core customer is Hess/Chevron-linked upstream production in the Bakken, which relies on Hess Midstream’s systems to move hydrocarbons and produced water from the field. The company is also trying to expand its third-party producer base and serve other midstream counterparties in the region to reduce concentration and improve asset utilization.

- **Sponsor-linked upstream production** (primary) — Hess/Chevron-related crude oil, gas and water volumes under commercial agreements that underpin base utilization.
- **Third-party oil and gas producers** (secondary) — Independent producers in the Bakken that contract for gathering, processing, terminaling and disposal services.
- **Midstream and logistics counterparties** (secondary) — Third parties that use rail, trucking, electricity and other reimbursable services tied to field operations.

- Hess/Chevron upstream volumes in the Bakken are the anchor customer base
- Third-party oil and gas producers use the system for gathering and processing
- Producers buy water handling and disposal capacity to support drilling activity
- Counterparties pay for terminaling and NGL logistics to access takeaway capacity
- Some revenues are pass-through reimbursements for rail, trucking and utilities

## Geography

Operations are concentrated in the Bakken and Three Forks shale plays in the Williston Basin of North Dakota, so the business is highly tied to local drilling, completion and production trends. This narrow footprint creates operating efficiency and density benefits, but it also increases exposure to regional weather, infrastructure competition and basin-specific volume swings.

- Primary operating footprint is the Bakken in North Dakota
- Assets are also tied to the Three Forks shale play in the Williston Basin
- Revenue depends on local production volumes and takeaway capacity in the basin
- Limited geography increases efficiency but raises concentration risk
- Weather and regional disruptions can affect throughput and facility uptime

## Strategy

Management is focused on growing fee-based volumes, especially by increasing third-party throughput and improving utilization of existing assets. Capital spending is being directed toward compression, gas capture and pipeline infrastructure to support sponsor production growth and to make the system more attractive to outside producers.

- **Grow third-party volumes** (short-term) — Diversifies the customer base and reduces reliance on sponsor-linked production.
- **Expand gas capture and compression** (medium-term) — Supports sponsor and third-party production growth while improving system utilization.
- **Optimize existing asset base** (medium-term) — Higher throughput on existing systems improves fee-based earnings without full greenfield buildout.

- Increase third-party revenues to reduce dependence on Chevron
- Expand compression and gas capture capacity to support higher throughput
- Build pipeline infrastructure to connect new and existing gathering systems
- Maximize utilization of existing terminals, processing plants and water assets
- Pursue strategic relationships with Bakken producers and midstream peers

## Risks

The company is highly exposed to Chevron/Hess production levels, so any slowdown in drilling or decline in regional volumes can reduce throughput and fee revenue. It also faces basin-level competition from other gathering, processing and terminaling systems, plus weather and operational disruptions that can affect asset uptime and contract renewals.

- **Customer concentration and sponsor dependence** [high] — A large share of volumes comes from Chevron/Hess-linked production, so weaker drilling or production directly reduces utilization and revenue.
- **Competitive pressure in the Bakken** [high] — Nearby competitors may have idle capacity or closer access to supply, making it harder to renew contracts or win third-party volumes.
- **Weather and operational disruption** [medium] — Seasonal weather and other natural or human causes can interrupt field operations and third-party infrastructure relied on by the company.
- **Merger integration and Chevron execution risk** [high] — The business is substantially dependent on Chevron, so integration issues or missed synergy targets could affect support and operating priorities.

- Heavy dependence on Chevron-linked volumes limits customer diversification
- Lower Bakken drilling activity would reduce gas and crude throughput
- Competition from nearby midstream systems can pressure rates and renewals
- Weather and other natural events can disrupt facilities and third-party assets
- Merger integration risk could distract Chevron and affect support for the business

## Accounting

Revenue is driven by fee-based throughput, minimum volume commitments, pass-through reimbursements and tariff changes, so reported results can move with volumes, rates and contract mechanics. Capital-intensive expansion also makes depreciation, useful-life estimates and capitalized project timing important, while accrued capital expenditures and affiliate payables can shift cash versus accrual presentation between periods.

- **Fee-based and pass-through revenue recognition** — Top-line growth can overstate underlying margin growth when pass-through items rise.
- **Minimum volume commitments and shortfall fee credits** — Quarter-to-quarter revenue can be affected by contract settlement timing.
- **Capitalized expansion projects and accrued capex** — Affects property, plant and equipment balances, depreciation and operating cash flow reconciliation.
- **Depreciation and useful life estimates** — Changes in estimates can materially affect operating profit over time.

- Fee-based revenue depends on throughput volumes and tariff rates
- Minimum volume commitments can create revenue recognition when shortfalls expire
- Pass-through costs are recorded as revenue equal to cost, affecting top line
- Capital expenditure timing affects accruals, payables and cash flow presentation
- Depreciation and asset lives matter because the business is asset-intensive

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*Last updated: 2026-04-28T20:14:44.098396+00:00*