Hess Midstream LP

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Hess Midstream LP

4.  Hess Midstream LP

At March 31, 2024, Hess Midstream LP, a variable interest entity that is fully consolidated by Hess Corporation, had liabilities totaling $3,460 million (December 31, 2023: $3,385 million) that are on a nonrecourse basis to Hess Corporation, while Hess Midstream LP assets available to settle the obligations of Hess Midstream LP included cash and cash equivalents totaling $4 million (December 31, 2023: $5 million), property, plant and equipment with a carrying value of $3,215 million (December 31, 2023: $3,229 million) and an equity-method investment in the Little Missouri 4 (LM4) gas processing plant of $89 million (December 31, 2023: $90 million). At March 31, 2024, we have an approximate 38% consolidated ownership interest in Hess Midstream LP on an as-exchanged basis, primarily through our ownership of Class B units in Hess Midstream Operations LP (HESM Opco), the operating subsidiary of Hess Midstream LP, which are exchangeable into Class A shares of Hess Midstream LP on a one-for-one basis.

LM4 is a 200 million standard cubic feet per day gas processing plant located south of the Missouri River in McKenzie County, North Dakota, that was constructed as part of a 50/50 joint venture between Hess Midstream LP and Targa Resources Corp. Hess Midstream LP has a natural gas processing agreement with LM4 under which it pays a processing fee and reimburses LM4 for its proportionate share of electricity costs. The processing fees included in Operating costs and expenses in the Statement of Consolidated Income for the three months ended March 31, 2024 were $7 million (2023: $5 million).

In February 2024, Hess Midstream LP completed an underwritten public equity offering of 11.5 million Hess Midstream LP Class A shares held by an affiliate of Global Infrastructure Partners (GIP). Hess Corporation did not receive any proceeds from this public equity offering. The transaction resulted in an increase in Noncontrolling interests and deferred tax assets of $94 million resulting from a step-up in the tax basis of Hess Midstream LP’s investment in HESM Opco.

In March 2024, HESM Opco repurchased approximately 2.8 million HESM Opco Class B units held by affiliates of Hess Corporation and GIP for $100 million, which was financed by HESM Opco's revolving credit facility. The transaction resulted in an

increase in deferred tax assets and Noncontrolling interests of $9 million due to an adjustment in the carrying value of Hess Midstream LP’s investment in HESM Opco without a corresponding adjustment in the tax basis. The $62 million paid to GIP reduced Noncontrolling interests.

In March 2023, HESM Opco repurchased approximately 3.6 million HESM Opco Class B units held by affiliates of Hess Corporation and GIP for $100 million, which was financed by HESM Opco's revolving credit facility. The transaction resulted in an increase in Capital in excess of par and a decrease in Noncontrolling interests of $8 million, and an increase in deferred tax assets and Noncontrolling interests of $4 million due to an adjustment in the carrying value of Hess Midstream LP’s investment in HESM Opco without a corresponding adjustment in the tax basis. The $50 million paid to GIP reduced Noncontrolling interests.