Hess Corp. (NYSE: HES) has agreed to sell a 50% interest in its Bakken midstream assets to Global Infrastructure Partners for cash consideration of $2.675 billion. Hess and Global Infrastructure Partners will create a midstream joint venture to be named Hess Infrastructure Partners.
Upon closing, the joint venture will incur $600 million of debt through a five-year Term Loan A facility with proceeds distributed equally to both partners, resulting in total after-tax cash proceeds, net to Hess, of $3 billion. In addition the joint venture will have independent access to capital including a $400 million five-year senior revolving credit facility, which is fully committed. The joint venture upon closing plans to continue to pursue a proposed initial public offering (IPO) of Hess Midstream Partners LP common units.
The Hess midstream assets to be included in the joint venture are a natural gas processing plant in Tioga, North Dakota; a rail loading terminal in Tioga and associated rail cars; a crude oil truck and pipeline terminal in Williams County, North Dakota; a propane storage cavern and rail and truck transloading facility in Mentor, Minnesota; and crude oil and natural gas gathering systems in North Dakota.
The transaction is expected to be completed early in the third quarter of 2015.