Hess to Form MLP

Will use master limited partnership as midstream vehicle to support Bakken growth

Published in CSP Daily News

Hess North Dakota Bakken MLP IPO (CSP Daily News / Convenience Stores / Gas Stations)

NEW YORK -- Hess Corp. has announced its intention to pursue the formation and initial public offering (IPO) of a master limited partnership (MLP).

The company "remains focused on value creation" and the pursuit of its previously announced intention to monetize its midstream assets in the Bakken oil shale play in North Dakota.

Hess intends to use the MLP as the primary midstream vehicle to support its Bakken production growth, and expects initially to contribute interests in the following midstream assets to the MLP:

  • Hess's natural gas processing plant in Tioga, N.D., where it recently completed a large-scale expansion, refurbishment and optimization program.
  • Hess's rail loading terminal and rail cars in Tioga.
  • Hess's crude oil truck and pipeline terminal in Tioga.
  • Hess's propane storage cavern and rail and truck loading and storage terminal in Mentor, Minn.

Hess will own the general partner of the MLP, all of its incentive distribution rights and a majority of its limited partner interests following completion of the IPO.

Hess expects the MLP to file a registration statement with the U.S. Securities & Exchange Commission (SEC) in fourth-quarter 2014 and, subject to market conditions, expects to make an IPO of common units representing limited partner interests in the MLP in first-quarter 2015.

The company exited the retail business earlier this year. In May, Marathon Petroleum Corp.'s Speedway LLC acquired all of Hess's retail locations, transport operations and shipper history on various pipelines for $2.87 billion.

Hess, based in New York, is now a leading global independent energy company engaged in the exploration and production of crude oil and natural gas.

Part of CSP's 2014 Convenience Top 101 retailers