Hess Midstream Partners subsidiary Hess North Dakota Pipelines has reached an agreement to purchase the crude oil and gas gathering assets of Summit Midstream Partners’ Tioga Gathering System in Williams County, North Dakota, US.
Under the agreement, the assets will be purchased for around $60m gross or $12m net to Hess Midstream.
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The transaction also includes an additional $7m of gross contingent payments subject to certain future performance metrics.
The acquisition comprises 73 miles of crude pipelines and 79 miles of gas pipelines.
In a separate deal, Hess Midstream’s sponsor, Hess Infrastructure Partners (HIP), agreed to acquire the water gathering assets of the Tioga System from Summit Midstream Partners. This includes 75 miles of produced water gathering pipelines.
Hess Midstream expects that it will have a right of first offer to purchase the water assets in the event HIP intends to sell the assets in the future.
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By GlobalDataHess Midstream Partners chief operating officer John Gatling said: “We are excited to extend our infrastructure footprint with the agreement to purchase the Tioga System’s crude oil and gas gathering assets.
“This bolt-on acquisition leverages our leading contract structure to create value through a competitive acquisition multiple over time for the investment and provides opportunity to expand our midstream services offering.”
The company noted that the Tioga System is complementary to its infrastructure. The system is currently delivering volumes into Hess Midstream’s gathering system.
The completion of the transaction is subject to customary closing conditions and expected to take place in the first quarter of this year.
