Oil and natural gas producer Hess Corp. is to sell half of its processing and pipeline unit in North Dakota's Bakken oil shale field.
The company has entered into an agreement with infrastructure investor Global Infrastructure Partners to sell a 50 percent stake in its Bakken midstream assets for $2.675 billion in cash. Including a planned debt offering, Hess will receive net proceeds of $3.0 billion.
Together, the two firms will form a midstream joint venture called Hess Infrastructure Partners which will include: 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 joint venture with its strategically located assets will be one of the largest midstream operators in the Bakken," said John Hess, CEO of Hess Corp. "By capitalizing on the financial strength and midstream energy experience of Global Infrastructure Partners, the joint venture will be in a strong position to fund future energy infrastructure investments and continue to grow its midstream business."
The jointly owned business plans to file for an initial public offering of common units upon closing of the transaction early in the third quarter of 2015.