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Description of Business
12 Months Ended
Dec. 31, 2021
Description Of Business [Abstract]  
Description of Business

Note 1. Description of Business

Description of Business. We are a fee-based, growth-oriented, Delaware limited partnership formed by Hess Infrastructure Partners GP LLC (“HIP GP LLC”) and our general partner in 2019 to own, operate, develop and acquire a diverse set of midstream assets and provide fee-based services to Hess and third-party customers. We are managed and controlled by Hess Midstream GP LLC, the general partner of our general partner. Our assets are primarily located in the Bakken and Three Forks shale plays in the Williston Basin area of North Dakota, which we collectively refer to as the Bakken.

Our assets and operations are organized into the following three segments: (i) gathering, (ii) processing and storage and (iii) terminaling and export (see Note 14, Segments).

Significant 2021 Activities. In 2020, we completed construction of a 150 MMcf/d natural gas processing capacity expansion at our Tioga Gas Plant (“TGP”). In the third quarter of 2021, we safely and successfully completed the planned maintenance turnaround at TGP, during which a series of plant tie-ins for the TGP expansion were also completed. The expansion was placed in service in October 2021. Total processing capacity of 400 MMcf/d became available concurrent with the completion of a third-party residue export expansion in February 2022.

2019 Restructuring. On December 16, 2019, the Company and the Partnership completed the transactions (the “Restructuring”) contemplated by the partnership restructuring agreement, dated October 3, 2019, by and among the Company, the Partnership and the other parties thereto. As a result of the Restructuring, the Company was delegated control of the Partnership and replaced the Partnership as its publicly traded successor.

Prior to the Restructuring, the Company and the Partnership were indirectly controlled by HIP GP LLC, the general partner of Hess Infrastructure Partners LP (“HIP”). HIP was originally formed in 2015 as a joint venture between Hess and GIP II Blue Holding, L.P. (formerly GIP II Blue Holding Partnership, L.P., or “GIP” and, together with Hess, the “Sponsors”).

Prior to the Restructuring:

HIP owned an 80% noncontrolling economic interest in each of (i) Hess North Dakota Pipelines Operations LP (“Gathering Opco”), which owns crude oil and natural gas gathering pipelines and compressor stations in North Dakota; (ii) Hess TGP Operations LP (“HTGP Opco”), which owns the Tioga Gas Plant, a natural gas processing and fractionation plant, including a residue gas pipeline in North Dakota; and (iii) Hess North Dakota Export Logistics Operations LP (“Logistics Opco”), which owns a crude oil and natural gas liquids (“NGL”) rail loading facility, crude oil rail cars and crude oil pipeline and truck receipt terminal in North Dakota (the “Joint Interest Assets”), a 100% interest in a produced water gathering and disposal business owned by Hess Water Services Holdings LLC (“Hess Water Services”) and a 100% interest in Hess Midstream Partners GP LP (“MLP GP LP”), which held all of the Partnership’s outstanding incentive distribution rights (the “IDRs”) and the general partner interest in the Partnership (the “GP Interest”), and controlled the Partnership;
the Partnership, in connection with its initial public offering (“IPO”) on April 10, 2017, owned a 20% controlling interest in the Joint Interest Assets and a 100% interest in Hess Mentor Storage Holdings LLC (“Mentor Holdings”), which owns a propane storage cavern and related rail and truck loading and unloading and storage terminal in Minnesota; and
the Sponsors directly owned HIP and an aggregate of 10,282,654 common units representing limited partner interests in the Partnership and 27,279,654 subordinated units representing limited partner interests in the Partnership.

Pursuant to the Restructuring, which was consummated on December 16, 2019, the Partnership acquired HIP, including HIP’s 80% interest in the Joint Interest Assets, 100% interest in Hess Water Services and the outstanding economic general partner interest and IDRs. The Partnership’s organizational structure converted from a master limited partnership into an “Up-C” structure in which the Partnership’s public unitholders received newly issued Class A shares (“Class A Shares”) representing limited partner interest in Hess Midstream LP in a one-for-one exchange. The Partnership changed its name to “Hess Midstream Operations LP” and became a consolidated subsidiary of the Company.

After giving effect to the Restructuring and the 2021 equity transactions described in Note 3:

the Partnership owns 100% of the Joint Interest Assets, Hess Water Services and MLP GP LP, which continues to hold all of the IDRs and the GP Interest;
the Sponsors (i) directly hold all of the Class B units (“Class B Units”) representing limited partner interests in the Partnership, (ii) indirectly own 100% of the ownership interests in our general partner, which holds 898,000 Class A Shares (economic and voting) and all of the Class B shares (non-economic, voting only) representing limited partner interests in the Company (“Class B Shares”) and (iii) received $601.8 million in cash;
Class B Units of the Partnership together with the same number of Class B Shares of the Company are convertible to Class A Shares of the Company on a one-for-one basis;
the Class A Shares commenced trading on the New York Stock Exchange under the symbol “HESM” on December 17, 2019;
at December 31, 2021, the Company held a 13.3% controlling interest in the Partnership and the Sponsors held a 86.7% noncontrolling economic interest in the Partnership (2020: the Company held a 6.3% controlling interest in the Partnership and the Sponsors held a 93.7% noncontrolling economic interest in the Partnership);
at December 31, 2021, public limited partners held a 12.9% voting interest and a 97.3% economic interest in the Company, which represents an indirect 12.9% economic interest in the Partnership (2020: public limited partners held a 6.0% voting interest and a 95.0% economic interest in the Company, which represented an indirect 6.0% economic interest in the Partnership);
at December 31, 2021, the Sponsors and their respective affiliates held an 87.1% voting interest and a 2.7% economic interest in the Company, which, taken with their direct limited partnership interest in the Partnership, represents an indirect 87.1% economic interest in the Partnership (2020: the Sponsors and their respective affiliates held a 94.0% voting interest and a 5.0% economic interest in the Company, which represented an indirect 94.0% economic interest in the Partnership); and
the Sponsors own 100% interest in the general partner of the Company and, through their ownership of the general partner, continue to have the right to elect the entire board of directors.

The acquisition of HIP by the Partnership, including its 80% economic interest in the Joint Interest Assets and 100% interest in Hess Water Services, was accounted for as an acquisition of a business under common control. Accordingly, our consolidated financial statements for the year ended December 31, 2019 are presented as if the acquisition occurred at the beginning of the year. See Note 4, Acquisitions.

LM4 Joint Venture. On January 25, 2018, we entered into a 50/50 joint venture with Targa Resources Corp. (“Targa”) to construct a new 200 MMcf/d gas processing plant called Little Missouri 4 (“LM4”). LM4 was placed in service in the third quarter of 2019. Targa is the operator of the plant. See Note 5, Related Party Transactions.