Chevron to Buy Hess Midstream DJ Assets for $200 Million
Chevron will swap its Hess Midstream ownership and general partner stake for longer Bakken midstream terms and cash it said would cut Bakken unit midstream costs about 50%.
Chevron Corporation (CVX) agreed to an asset purchase from Hess Midstream LP (HESM) in which it will take ownership interests and the general partner position in Hess Midstream’s DJ Basin crude oil midstream assets, receiving extended Bakken midstream commercial terms and $200 million in cash. The deal is expected to close by year-end 2026.
The oil major said the swap is designed to reset the commercial framework between its upstream and midstream assets in the Bakken and DJ Basins, lower Bakken unit midstream costs by approximately 50%, and improve return on capital employed.
“This transaction resets the commercial framework between our upstream and midstream assets in the Bakken and DJ Basins,” said Andy Walz, Chevron’s President of Downstream, Midstream and Chemicals. “It lowers our Bakken cost structure while positioning Hess Midstream to advance as an independent company.”
Hess Midstream is a fee-based limited partnership that owns, operates, develops and acquires midstream assets, primarily in the Bakken and Three Forks shale plays in the Williston Basin area of North Dakota. Its reportable segments are gathering, processing and storage, and terminaling and export. Long-term, fee-based commercial agreements with Chevron, dated to 2014 for oil and gas services and 2019 for water, were extended for a second 10-year term through December 31, 2033.
Chevron has been Hess Midstream’s sponsor since July 18, 2025, after the Hess Corporation merger closed on July 17, 2025. At that time, Chevron beneficially owned Hess’ approximately 37.8% interest in the partnership on a consolidated basis, and Walz joined the board as chairman.
In the second quarter of 2026, Hess Midstream reported consolidated net income of $173.7 million, adjusted EBITDA of $313.7 million, and revenues of $399.0 million, down from $414.2 million a year earlier on lower throughput volumes. Throughput volumes decreased 15% for oil terminaling and 12% for water gathering versus the year-ago quarter, primarily due to lower production from lower new-well activity, and 4% for gas processing, primarily due to planned maintenance at the Tioga Gas Plant.
The partnership’s senior unsecured debt was rated BBB- by S&P Global Ratings and Ba1 by Moody’s at June 30, 2026. In the first quarter, it purchased 455,811 Class B units from the sponsor for about $18.0 million and repurchased $42.0 million of Class A shares through an accelerated share repurchase, both funded with borrowings under its revolving credit facility.
Chevron said the cash consideration and the extended Bakken commercial terms are the consideration for the DJ Basin crude oil midstream assets and the general partner position, with the transaction expected to close by year-end 2026.