Hess Midstream LP Class A Representing Limited Partner Interests

Hess Midstream owns gathering, compression, processing, water-handling, storage, pipeline and terminal assets serving the Bakken, including the Tioga Gas Plant and connected crude-oil and NGL infrastructure. Customers pay fees tied to volumes handled, and Chevron’s agreements include dedications, minimum-volume commitments and shortfall payments; Chevron and its affiliates accounted for about 97% of 2025 revenue. The assets’ location and connections, combined with the cost and disruption of building alternatives, give the business a real but geographically and commercially concentrated switching-cost advantage. Pricing is substantially contractual: most major agreements are in their secondary terms through 2033, with CPI adjustments capped at 3%, and minimum-volume commitments provide a floor but not protection against every operational or customer risk. Cash generation is understandable: 2025 operating cash flow of about $984 million less $256 million of capex was about $728 million, although recent capex includes expansion projects and should not all be treated as recurring maintenance. I estimate normalized consolidated equity owner earnings of $600–800 million annually, after interest and recurring capital needs, and value the existing business at roughly $6.5–10 billion using a conservative, largely no-growth capitalization; I do not add value for the announced but unclosed acquisition because the pack does not provide enough target economics to underwrite it. The June 2026 filing shows weaker oil and water volumes and lower gas-processing volumes in the second quarter, while shortfall fees may be credited against later excess volumes, so the contractual floor does not eliminate throughput risk. Chevron owns the general partner and controls the board, affiliate costs are reimbursed under agreements without a stated cap, and the partnership agreement narrows fiduciary duties; Chevron’s substantial economic interest and conflicts-committee reviews provide some alignment, so management is mixed. The October 2026 purchase agreement could broaden the asset base, but its commercial-contract consideration, target earnings and assumed obligations are not sufficiently specified here, and the deal has not closed. The statement history has only seven fiscal-year observations, the 2019–2020 change reflects a restructuring, and ownership and share counts changed materially through sponsor sales and repurchases, limiting simple historical comparisons. Ten years from now, producers in the Bakken will still need reliable gathering and takeaway infrastructure if production remains economic, but a lasting decline in Chevron’s drilling, weaker contract terms, an uninsured operating or environmental failure, excessive leverage, or poorly priced acquisitions could materially impair the business.