Hess Midstream lowers expected 2020 gas volume guidance

March 18, 2020
Hess Midstream has updated full-year 2020 volume guidance, incorporating Hess Corp.’s updated guidance to reduce Bakken rig activity starting second-quarter 2020 as well as lower expected third-party activity.

Hess Midstream has updated full-year 2020 volume guidance, incorporating Hess Corp.’s updated guidance to reduce Bakken rig activity starting second-quarter 2020 as well as lower expected third-party activity (OGJ Online, Mar. 17, 2020). Driven by strong year-to-date performance, full-year 2020 guidance for crude gathering, crude terminaling, and water gathering throughput volumes is unchanged while gas gathering and gas processing volumes are expected to be modestly lower than previous guidance.

Hess Midstream’s planned 150-MMcfd expansion of its Tioga, ND, gas plant to a total processing capacity of 400 MMcfd is progressing ahead of schedule with plant tie-ins expected to be conducted during a previously announced third-quarter maintenance turnaround and construction now expected to be completed by end-2020. Full incremental capacity from the planned expansion is expected to be available in 2021, commensurate with the completion of third-party NGL and residue gas takeaway lines.

Consistent with Hess’s expected reduced activity, Hess Midstream is reducing 2020 expansion capital by about $75 million, or 20%, to $260 million from previously announced guidance, primarily due to fewer expected well connects and the deferral or cancellation of certain gas compression activities. Full-year 2020 maintenance capital guidance of $15 million is unchanged. 

Hess Midstream also plans to reduce expected 2021 expansion capital expenditures relative to its previous 2021 plan by $125 million, or 55%, to roughly $100 million.