Hess Corp (NYSE: HES) has announced the completion of its previously announced $2.675 billion sale of a 50 percent interest in its Bakken midstream assets to Global Infrastructure Partners.
The deal between the two companies created a premier midstream joint venture dubbed Hess Infrastructure Partners. The business venture, though, incurred $600 million of debt which, through a five-year term loan a facility, will distribute proceeds equally to both partners. The total after-tax cash proceeds will net Hess $3 billion.
Additionally, the joint venture has independent access to capital including a fully committed $400 million five-year senior revolving credit facility. Also, as previously announced, the combined entity will proceed with an initial public offering of Hess Midstream Partners LP common stock units.
In a statement, Hess CEO John Hess said, “The joint venture with its strategically located assets will be one of the largest midstream operators in the Bakken. By capitalizing on the financial strength and midstream energy experience of Global Infrastructure Partners, the joint venture will be in strong position to fund future energy infrastructure investments and continue to grow its midstream business.”
The joint venture involved numerous Hess midstream assets such as a natural gas processing plant, rail loading terminal and associated rail cars in Tioga, North Dakota, as well as a crude oil truck and pipeline terminal in Williams County, North Dakota. Also included in the deal was a propane storage cavern and rail truck transloading facility in Mentor, Minnesota, and crude oil and natural gas gathering systems in North Dakota.