Moves oil and gas from Hess Corporation's North Dakota wellpads through dedicated heated pipelines to Tioga Gas Plant.
What stands out
- Returns appear driven by leverage
- Pays out more in dividends than it earns
Moves oil and gas from Hess Corporation's North Dakota wellpads through dedicated heated pipelines to Tioga Gas Plant.
Hess Midstream gathers crude and gas from Hess Corporation's Bakken wellpads in North Dakota and runs it through temperature-controlled pipelines to Tioga Gas Plant, where impurities and natural gas liquids are stripped before the volumes reach DAPL and regional takeaway systems. Bakken crude carries enough paraffin that if a gathering line goes cold it solidifies in place, so every pipeline in the network must run continuously from the moment a wellpad connects to it — which means Tioga must also run without interruption, because a backup anywhere upstream blocks production across every connected wellpad at once. Long-term acreage dedication agreements lock Hess legally to these specific lines, but the physical connection matters more in practice: a competing midstream provider would have to dig up and duplicate every buried lateral at each wellhead and then build a processing plant sized to match Tioga's throughput, which cannot be done economically in pieces. The whole system depends on Hess continuing to drill within the existing lateral network — if Hess shifts drilling to acreage the buried pipes do not reach, gathered volumes fall and nothing inside the system can fill that gap, because the infrastructure is anchored to specific wellpad coordinates, not to the Bakken basin as a whole.
How does this company make money?
The company charges a fee for every barrel of oil it moves through its pipeline system and a separate fee for every unit of gas transported. It also charges processing fees for the work done at Tioga Gas Plant — conditioning the gas and extracting the natural gas liquids before volumes move onto the broader pipeline network.
What makes this company hard to replace?
Long-term acreage dedication agreements with Hess Corporation legally prevent other midstream providers from accessing those same wellpads. Even if a competitor wanted to ignore that, the physical pipe connections already buried at each wellhead would have to be duplicated at full cost. And because Tioga Gas Plant's processing capacity was built specifically for the volumes gathered from this acreage, a rival would face processing economics that make duplication financially unworkable.
What limits this company?
Every gathering pipeline is buried in the ground at specific wellpad locations on Hess-dedicated acreage. If Hess decides to drill new wells on land outside that network, the existing pipes cannot reach them. Building new pipelines to follow that drilling requires constructing entire new corridors and compression equipment — there is no small or gradual way to do it.
What does this company depend on?
The company cannot run without Bakken wellhead production from Hess Corporation and third-party operators feeding the lines, Tioga Gas Plant remaining operational to process that flow, access to DAPL and other regional takeaway pipeline systems to move conditioned volumes onward, electrical power to keep compressor stations and processing facilities running, and road access permits from North Dakota for pipeline maintenance work.
Who depends on this company?
Bakken oil producers, including Hess Corporation, would face wellhead shut-ins if the gathering pipelines stopped accepting flow. DAPL and regional takeaway pipelines would lose the Bakken crude volumes they rely on. Tioga Gas Plant would have no feedstock for its NGL extraction and gas processing operations. North Dakota gas utilities would lose processed natural gas that currently comes from Bakken production moving through this system.
How does this company scale?
Adding a new wellpad connection follows a standardized process using the same type of gathering pipeline extensions and compression equipment already in use, so incremental growth within the existing dedicated acreage is relatively straightforward. Expanding to new acreage outside the current network is a different matter — it requires building entirely new major pipeline corridors and processing facilities, which only make financial sense above a minimum volume threshold that cannot be reached incrementally.
What external forces can significantly affect this company?
Federal pipeline safety regulations can require the company to install upgraded leak detection and emergency shutdown systems, adding cost without adding revenue. North Dakota state permitting controls where new pipeline routes can go across agricultural land, which can slow or block expansion. Canadian crude oil competes for the same regional takeaway pipeline capacity heading to Gulf Coast refineries, which can squeeze available space for Bakken volumes.
Where is this company structurally vulnerable?
If Hess Corporation slows down its Bakken drilling or moves wells to acreage that sits outside the existing lateral network, the volume of oil and gas flowing into Tioga Gas Plant drops. Because every pipe is fixed to specific coordinates in the ground, there is no way to pull in replacement volumes from somewhere else without building entirely new infrastructure.
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