Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | HESM | |
Entity Registrant Name | Hess Midstream LP | |
Entity Central Index Key | 0001789832 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 001-39163 | |
Entity Tax Identification Number | 84-3211812 | |
Entity Address, Address Line One | 1501 McKinney Street | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77010 | |
City Area Code | 713 | |
Local Phone Number | 496-4200 | |
Entity Common Stock, Shares Outstanding | 44,002,846 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE | |
Title of 12(b) Security | Class A shares representing limited partner interests | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 2.6 | $ 2.2 |
Accounts receivable—affiliate: | ||
From contracts with customers | 130.7 | 120.3 |
Other current assets | 13.5 | 10.6 |
Total current assets | 146.8 | 133.1 |
Equity investments | 98.3 | 101.6 |
Property, plant and equipment, net | 3,159.6 | 3,125 |
Long-term receivable—affiliate | 0.7 | 0.8 |
Deferred tax asset | 184.1 | 117.3 |
Other noncurrent assets | 12 | 7.8 |
Total assets | 3,601.5 | 3,485.6 |
Liabilities | ||
Accounts payable—trade | 34.6 | 26.9 |
Accounts payable—affiliate | 29.6 | 37.6 |
Accrued liabilities | 83.8 | 76.2 |
Current maturities of long-term debt | 20 | |
Other current liabilities | 9.5 | 10.2 |
Total current liabilities | 157.5 | 170.9 |
Long-term debt | 2,909 | 2,543.5 |
Deferred tax liability | 0.4 | 0.4 |
Other noncurrent liabilities | 20.7 | 17.7 |
Total liabilities | 3,087.6 | 2,732.5 |
Partners' capital | ||
Total partners' capital | 247.8 | 204.1 |
Noncontrolling interest | 266.1 | 549 |
Total partners' capital | 513.9 | 753.1 |
Total liabilities and partners' capital | 3,601.5 | 3,485.6 |
Class A Shares | ||
Partners' capital | ||
Common unitholders | $ 247.8 | $ 204.1 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Sep. 30, 2022 | Dec. 31, 2021 |
Class A Shares | ||
Common units issued | 44,002,846 | 33,672,068 |
Common units outstanding | 44,002,846 | 33,672,068 |
Class B Shares | ||
Common units issued | 195,847,606 | 219,641,928 |
Common units outstanding | 195,847,606 | 219,641,928 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues | ||||
Affiliate services | $ 334.2 | $ 303.9 | $ 959.3 | $ 887.5 |
Type of Revenue [Extensible List] | us-gaap:ServiceMember | us-gaap:ServiceMember | us-gaap:ServiceMember | us-gaap:ServiceMember |
Other income | $ 0.6 | $ 1.3 | ||
Total revenues | 334.8 | $ 303.9 | 960.6 | $ 887.5 |
Costs and expenses | ||||
Operating and maintenance expenses (exclusive of depreciation shown separately below) | 79.6 | 98.1 | 213.9 | 221.5 |
Depreciation expense | 45.5 | 41.5 | 134.9 | 122.1 |
General and administrative expenses | 5.7 | 5.1 | 17 | 16.6 |
Total costs and expenses | 130.8 | 144.7 | 365.8 | 360.2 |
Income from operations | 204 | 159.2 | 594.8 | 527.3 |
Income from equity investments | 2.8 | 3 | 4.2 | 8.6 |
Interest expense, net | 39.9 | 28 | 108.6 | 74 |
Income before income tax expense | 166.9 | 134.2 | 490.4 | 461.9 |
Income tax expense | 7.5 | 3.1 | 19.6 | 9.2 |
Net income | 159.4 | 131.1 | 470.8 | 452.7 |
Less: Net income attributable to noncontrolling interest | 136.2 | 121.2 | 408.7 | 423.2 |
Net income attributable to Hess Midstream LP | $ 23.2 | $ 9.9 | $ 62.1 | $ 29.5 |
Class A Shares | ||||
Net income attributable to Hess Midstream LP per Class A share: | ||||
Net income attributable to Hess Midstream LP per Class A share, Basic | $ 0.53 | $ 0.39 | $ 1.54 | $ 1.27 |
Net income attributable to Hess Midstream LP per Class A share, Diluted | $ 0.53 | $ 0.38 | $ 1.52 | $ 1.25 |
Weighted average Class A shares outstanding | ||||
Weighted average Class A shares outstanding subsequent to the restructuring, Basic | 44 | 25 | 40.5 | 23.1 |
Weighted average Class A shares outstanding subsequent to the restructuring, Diluted | 44.1 | 25.1 | 40.5 | 23.2 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (UNAUDITED) - USD ($) $ in Millions | Total | Limited Partner Class A Shares | Noncontrolling Interest |
Balance, beginning of period at Dec. 31, 2020 | $ 1,326 | $ 125 | $ 1,201 |
Net income | 159.6 | 8.6 | 151 |
Equity-based compensation | 0.4 | 0.4 | |
Distributions to unitholders | (127.3) | (8.2) | (119.1) |
Recognition of deferred tax asset | 26.4 | 26.4 | |
Sales of shares held by Sponsors | 31.8 | (31.8) | |
Balance, end of period at Mar. 31, 2021 | 1,385.1 | 184 | 1,201.1 |
Balance, beginning of period at Dec. 31, 2020 | 1,326 | 125 | 1,201 |
Net income | 452.7 | ||
Balance, end of period at Sep. 30, 2021 | 669.1 | 135.7 | 533.4 |
Balance, beginning of period at Mar. 31, 2021 | 1,385.1 | 184 | 1,201.1 |
Net income | 162 | 11 | 151 |
Equity-based compensation | 0.3 | 0.3 | |
Distributions to unitholders | (128.8) | (11.3) | (117.5) |
Balance, end of period at Jun. 30, 2021 | 1,418.6 | 184 | 1,234.6 |
Net income | 131.1 | 9.9 | 121.2 |
Equity-based compensation | 0.4 | 0.4 | |
Distributions to unitholders | (143.6) | (12.7) | (130.9) |
Recognition of deferred tax asset | 14.8 | 14.8 | |
Class B unit repurchase | (750) | (60.4) | (689.6) |
Class B unit repurchase transaction costs | (2.2) | (0.3) | (1.9) |
Balance, end of period at Sep. 30, 2021 | 669.1 | 135.7 | 533.4 |
Balance, beginning of period at Dec. 31, 2021 | 753.1 | 204.1 | 549 |
Net income | 159.6 | 16.9 | 142.7 |
Equity-based compensation | 0.5 | 0.5 | |
Distributions to unitholders | (131) | (17.5) | (113.5) |
Transaction costs | (0.4) | (0.1) | (0.3) |
Balance, end of period at Mar. 31, 2022 | 781.8 | 203.9 | 577.9 |
Balance, beginning of period at Dec. 31, 2021 | 753.1 | 204.1 | 549 |
Net income | 470.8 | ||
Balance, end of period at Sep. 30, 2022 | 513.9 | 247.8 | 266.1 |
Balance, beginning of period at Mar. 31, 2022 | 781.8 | 203.9 | 577.9 |
Net income | 151.8 | 22 | 129.8 |
Equity-based compensation | 0.4 | 0.4 | |
Distributions to unitholders | (131.8) | (24.2) | (107.6) |
Recognition of deferred tax asset | 86.4 | 86.4 | |
Sales of shares held by Sponsors | 27 | (27) | |
Class B unit repurchase | (400) | (66.6) | (333.4) |
Transaction costs | (1.1) | (0.2) | (0.9) |
Balance, end of period at Jun. 30, 2022 | 487.5 | 248.7 | 238.8 |
Net income | 159.4 | 23.2 | 136.2 |
Equity-based compensation | 0.4 | 0.4 | |
Distributions to unitholders | (133.4) | (24.5) | (108.9) |
Balance, end of period at Sep. 30, 2022 | $ 513.9 | $ 247.8 | $ 266.1 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Statement of Partners' Capital [Abstract] | ||||||
Distributions to unitholders - per share | $ 0.5559 | $ 0.5492 | $ 0.5167 | $ 0.5042 | $ 0.4526 | $ 0.4471 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net income | $ 470.8 | $ 452.7 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation expense | 134.9 | 122.1 |
(Income) loss from equity investments | (4.2) | (8.6) |
Distributions from equity investments | 7.5 | 14.6 |
Amortization of deferred financing costs | 6.6 | 5.3 |
Equity-based compensation expense | 1.3 | 1.1 |
Deferred income tax expense (benefit) | 19.6 | 9.2 |
Changes in assets and liabilities: | ||
Accounts receivable – affiliate | (10.3) | (42.3) |
Other current and noncurrent assets | (3.9) | (7.9) |
Accounts payable – trade | 7.7 | 18.6 |
Accounts payable – affiliate | (1.7) | 9.6 |
Accrued liabilities | 8 | (0.4) |
Other current and noncurrent liabilities | 2.2 | (2) |
Net cash provided by (used in) operating activities | 638.5 | 572 |
Cash flows from investing activities | ||
Additions to property, plant and equipment | (176.6) | (120) |
Net cash provided by (used in) investing activities | (176.6) | (120) |
Cash flows from financing activities | ||
Net proceeds from (repayments of) bank borrowings with maturities of 90 days or less | (61) | (32) |
Bank borrowings with maturities of greater than 90 days | ||
Borrowings | 20 | |
Repayments | (10) | (7.5) |
Proceeds from issuance of bonds | 400 | 750 |
Deferred financing costs | (13) | (11) |
Transaction costs | (1.3) | (1.8) |
Class B unit repurchase | (400) | (750) |
Distributions to shareholders/unitholders | (66.2) | (32.2) |
Distributions to noncontrolling interest | (330) | (367.5) |
Net cash provided by (used in) financing activities | (461.5) | (452) |
Increase (decrease) in cash and cash equivalents | 0.4 | |
Cash and cash equivalents, beginning of period | 2.2 | 2.6 |
Cash and cash equivalents, end of period | 2.6 | 2.6 |
Supplemental disclosure of non-cash investing and financing activities: | ||
(Increase) decrease in accrued capital expenditures and related liabilities | 7.2 | (8.6) |
Recognition of deferred tax asset | $ 86.4 | $ 41.2 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Description Of Business [Abstract] | |
Description of Business | Note 1. Description of Business Hess Midstream LP (“the Company”) is a fee-based, growth-oriented, Delaware limited partnership that operates, develops and acquires a diverse set of midstream assets and provides fee-based services to Hess Corporation (“Hess”) and third-party customers. We are managed and controlled by Hess Midstream GP LLC, the general partner of our general partner that is owned 50 / 50 by Hess and GIP II Blue Holding, L.P. (“GIP” and together with Hess, the “Sponsors”). Our assets are primarily located in the Bakken and Three Forks shale plays in the Williston Basin area of North Dakota, which we collectively refer to as the Bakken. Our assets and operations are organized into the following three reportable segments: (1) gathering, (2) processing and storage and (3) terminaling and export (see Note 13, Segments ). Unless the context otherwise requires, references in this report to the “Company,” “we,” “our,” “us” or like terms, refer to Hess Midstream LP and its subsidiaries. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 2. Basis of Presentation The consolidated financial statements included in this report reflect all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of our consolidated financial position at September 30, 2022 and December 31, 2021, the consolidated results of operations for the three and nine months ended September 30, 2022 and 2021, and the consolidated cash flows for the nine months ended September 30, 2022 and 2021. The Company has no items of other comprehensive income (loss); therefore, net income (loss) is equal to comprehensive income (loss). The unaudited results of operations for the interim periods reported are not necessarily indicative of results to be expected for the full year. The consolidated financial statements were prepared in accordance with the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain notes or other financial information that are normally required by U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted from these interim consolidated financial statements. These financial statements, therefore, should be read in conjunction with the financial statements and related notes included in the Company’s annual report on Form 10‑K for the year ended December 31, 2021. We consolidate the activities of Hess Midstream Operations LP (“the Partnership”), as a variable interest entity (“VIE”) under U.S. GAAP. We have concluded that we are the primary beneficiary of the VIE, as defined in the accounting standards, since we have the power, through our ownership, to direct those activities that most significantly impact the economic performance of the Partnership. This conclusion was based on a qualitative analysis that considered the Partnership’s governance structure and the delegation of control provisions, which provide us the ability to control the operations of the Partnership. All financial statement activities associated with the VIE are captured within gathering, processing and storage, and terminaling and export segments (see Note 13, Segments ). We currently do not have any independent assets or operations other than our interest in the Partnership. Our noncontrolling interest represents the approximate 81.7 % interest in the Partnership retained by Hess and GIP at September 30, 2022 ( 86.7 % at December 31, 2021). See Note 3, Equity Transactions for a description of changes in noncontrolling interest related to the equity transactions. |
Equity Transactions
Equity Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Equity Transactions | Note 3. Equity Transactions Equity Offering Transactions On March 15, 2021, the Sponsors sold an aggregate of 6,900,000 of our Class A shares representing limited partner interests (“Class A Shares”), inclusive of the underwriters’ option to purchase up to 900,000 of additional shares, which was fully exercised, in an underwritten public offering at a price of $ 21.00 per Class A Share, less underwriting discounts. The Sponsors received net proceeds from the offering of approximately $ 139.9 million, after deducting underwriting discounts. On April 4, 2022, the Sponsors sold an aggregate of 10,235,000 of our Class A Shares, inclusive of the underwriters’ option to purchase up to 1,335,000 of additional shares, which was fully exercised, in an underwritten public offering at a price of $ 29.50 per Class A Share, less underwriting discounts. The Sponsors received net proceeds from the offering of approximately $ 291.7 million, after deducting underwriting discounts. The Company did no t receive any proceeds in the offerings. The above equity offering transactions were conducted pursuant to a registration rights agreement among us and the Sponsors. The Class A Shares sold in the offerings were obtained by the Sponsors by exchanging to us the respective number of their Class B Units in the Partnership, together with an equal number of our Class B Shares and, a s a result, the total number of Class A and Class B Shares did not change. The Company retained control in the Partnership based on the delegation of control provisions, as described in Note 2, Basis of Presentation . As a result of the equity offering transactions described above, we recognized adjustments increasing the amount of the Class A shareholders’ capital balance by $ 27.0 million and decreasing the carrying amount of noncontrolling interest by an equal amount (nine months ended September 30, 2021: $ 31.8 million) to reflect the change in ownership interest. Class B Unit Repurchase On July 2 7, 2021, the Company, the Partnership and our Sponsors entered into a unit repurchase agreement pursuant to which the Partnership agreed to purchase from each Sponsor 15,625,000 Class B Units representing limited partner interests in the Partnership for an aggregate purchase price of $ 750.0 million. The purchase price per Class B Unit was $ 24.00 , representing an approximate 4 % discount to the 30-day volume weighted average trading price of Class A shares representing limited partner interests in the Company through July 27, 2021. Pursuant to the terms of the repurchase agreement, immediately following the purchase of the Class B Units from the Sponsors, the Partnership cancelled those units, and the Company cancelled, for no consideration, an equal number of Class B Shares representing limited partner interests in the Company held by the Company’s general partner. The repurchase transaction closed on August 10, 2021 and was funded through issuance by the Partnership of $ 750.0 million aggregate principal amount of senior unsecured notes (see Note 7, Debt and Interest Expense ). On March 29, 2022, the Company, the Partnership and our Sponsors entered into a unit repurchase agreement pursuant to which the Partnership agreed to purchase from the Sponsors, subject to the secondary equity offering transaction described above, an aggregate number of Class B Units representing limited partner interests in the Partnership to be determined by dividing (a) $ 400.0 million by (b) the public offering price of the Class A Shares to be set in the secondary offering. On April 4, 2022, the repurchase transaction closed, and the Partnership purchased directly from the Sponsors 13,559,322 Class B Units at a purchase price per Class B Unit of $ 29.50 , which is equal to the public offering price per Class A Share in the transaction described above. Pursuant to the terms of the repurchase agreement, immediately following the purchase of the Class B Units from the Sponsors, the Partnership cancelled those units, and the Company cancelled, for no consideration, an equal number of Class B Shares representing limited partner interests in the Company held by the Company’s general partner. The repurchase transaction was funded using borrowings under the Partnership’s revolving credit facility, which were subsequently repaid with proceeds from a $ 400.0 million senior unsecured notes offering (see Note 7, Debt and Interest Expense ). The repurchase transactions were accounted for in accordance with ASC 810 whereby changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary are accounted for as equity transactions. The carrying amounts of the noncontrolling interest were adjusted to reflect the changes in the ownership interest with the difference between the amounts of consideration paid and the amounts by which the noncontrolling interest were adjusted recognized as a reduction in equity attributable to Class A shareholders. We incurred approximately $ 1.5 million of costs directly attributable to the repurchase transaction (nine months ended September 30, 2021: $ 2.2 million) that were charged to equity. As a result of the equity offering transactions and the repurchase transactions described above, we also recognized an additional deferred tax asset of $ 86.4 million (nine months ended September 30, 2021: $ 41.2 million) related to the change in the difference between the carrying amount and tax basis of our investment in the Partnership. The effect of recognizing the additional deferred tax asset was included in Class A shareholders’ equity balance in the accompanying consolidated statement of changes in partners’ capital due to the transaction being characterized as a transaction among or with shareholders. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 4. Related Party Transactions In addition to the Class B unit repurchase transactions and distributions to the Sponsors disclosed elsewhere in the Notes to consolidated financial statements, we had the following related party transactions: Commercial Agreements Effective January 1, 2014, we entered into long-term fee-based (i) gas gathering, (ii) crude oil gathering, (iii) gas processing and fractionation, (iv) storage services, and (v) terminal and export services agreements with certain subsidiaries of Hess. Effective January 1, 2019, we entered into long-term fee-based water services agreements with a subsidiary of Hess. For the services performed under these commercial agreements, we receive a fee per barrel of crude oil, barrel of water, Mcf of natural gas, or Mcf equivalent of NGLs, as applicable, delivered during each month, and Hess is obligated to provide us with minimum volumes of crude oil, water, natural gas and NGLs. Minimum volume commitments (“MVCs”) are equal to 80 % of Hess’ nominations in each development plan that apply on a three-year rolling basis such that MVCs are set for the three years following the most recent nomination. Without our consent, the MVCs resulting from the nominated volumes for any quarter or year contained in any prior development plan shall not be reduced by any updated development plan unless dedicated production is released by us. The applicable MVCs may, however, be increased as a result of the nominations contained in any such updated development plan. Except for the water services agreements and except for a certain gathering sub-system as described below, each of our commercial agreements with Hess has an initial 10 -year term effective January 1, 2014 (“Initial Term”). For this gathering sub-system, the Initial Term is 15 years effective January 1, 2014 and for the water services agreements the Initial Term is 14 years effective January 1, 2019. Each of our commercial agreements other than our storage services agreement includes an inflation escalator and a fee recalculation mechanism that allows fees to be adjusted annually during the Initial Term for updated estimates of cumulative throughput volumes and our capital and operating expenditures in order to target a return on capital deployed over the Initial Term of the applicable commercial agreement (or, with respect to the crude oil services fee under our terminal and export services agreement, the 20 -year period commencing on the effective date of the agreement). We have the unilateral right, exercisable by the delivery of a written notice on or before the date that is three years prior to the expiration of the Initial Term, to extend each commercial agreement for one additional 10 -year term (“Secondary Term”). For a certain gathering sub-system, the Secondary Term is 5 -years and for the water services agreements the Secondary Term is 10 years. On December 30, 2020, we exercised our renewal options to extend the terms of certain crude oil gathering, terminaling, storage, gas processing and gas gathering commercial agreements with Hess for the Secondary Term through December 31, 2033. There were no changes to any provisions of the existing commercial agreements as a result of the exercise of the renewal options. For the remaining water gathering and disposal agreements as well as the remaining gas gathering agreement, we have the sole option to renew these agreements for an additional term that is exercisable at a later date. During the Secondary Term of each of our commercial agreements other than our storage services agreement and terminal and export services agreement (with respect to crude oil terminaling services), the fee recalculation model under each applicable agreement will be replaced by an inflation-based fee structure. The initial fee for the first year of the Secondary Term will be determined based on the average fees paid by Hess under the applicable agreement during the last three years of the Initial Term (with such fees adjusted for inflation through the first year of the Secondary Term). For each year following the first year of the Secondary Term, the applicable fee will be adjusted annually based on the percentage change in the consumer price index, provided that we may not increase any fee by more than 3 % in any calendar year solely by reason of an increase in the consumer price index, and no fee will ever be reduced below the amount of the applicable fee payable by Hess in the prior year as a result of a decrease in the consumer price index. During the Secondary Term of our commercial agreements, Hess will continue to have MVCs equal to 80 % of Hess’ nominations in each development plan that apply on a three-year rolling basis through the Secondary Term. For the three and nine months ended September 30, 2022 and 2021, approximately 100 % of our revenues were attributable to our fee‑based commercial agreements with Hess, including revenues from third‑party volumes contracted with Hess and delivered to us under these agreements. We retain control of our assets and the flow of volumes based on available capacity within our integrated gathering, processing and terminaling systems. Together with Hess, we are pursuing strategic relationships with third‑party producers and other midstream companies with operations in the Bakken in order to maximize our utilization rates. Revenues from contracts with customers on a disaggregated basis are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Oil and gas gathering services $ 160.5 $ 135.3 $ 454.2 $ 397.4 Processing and storage services 121.7 111.1 352.0 319.9 Terminaling and export services 30.5 35.5 95.5 103.0 Water gathering and disposal services 21.5 22.0 57.6 67.2 Total revenues from contracts with customers $ 334.2 $ 303.9 $ 959.3 $ 887.5 Other income 0.6 - 1.3 - Total revenues $ 334.8 $ 303.9 $ 960.6 $ 887.5 The following table presents MVC shortfall fees earned during each period: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Oil and gas gathering services $ 20.1 $ 13.3 $ 71.9 $ 30.2 Processing and storage services - 4.4 22.8 4.4 Terminaling and export services 6.9 11.9 23.5 24.6 Water gathering and disposal services - 2.0 0.4 4.5 Total $ 27.0 $ 31.6 $ 118.6 $ 63.7 The following table presents third-party pass-through costs for which we recognize revenues in an amount equal to the costs. These third-party costs are included in Operating and maintenance expenses in the accompanying unaudited consolidated statements of operations. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Electricity and other related fees $ 12.7 $ 19.7 $ 35.2 $ 38.9 Produced water trucking and disposal costs 9.4 9.0 25.2 27.1 Rail transportation costs - - 4.3 0.1 Total $ 22.1 $ 28.7 $ 64.7 $ 66.1 Omnibus and Employee Secondment Agreements Under our omnibus and employee secondment agreements, Hess provides substantial operational and administrative services to us in support of our assets and operations. For the three and nine months ended September 30, 2022 and 2021, we had the following charges from Hess. The classification of these charges between operating and maintenance expenses and general and administrative expenses is based on the fundamental nature of the services being performed for our operations. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Operating and maintenance expenses $ 17.8 $ 16.7 $ 51.4 $ 48.2 General and administrative expenses 4.0 3.7 11.5 11.5 Total $ 21.8 $ 20.4 $ 62.9 $ 59.7 LM4 Agreements Separately from our commercial agreements with Hess, we entered into a gas processing agreement with Little Missouri 4 (“LM4”), a 50 / 50 joint venture with Targa Resources Corp., under which we pay a processing fee per Mcf of natural gas and reimburse LM4 for our proportionate share of electricity costs. These processing fees are included in Operating and maintenance expenses in the accompanying consolidated statements of operations. In addition, we share profits and losses and receive distributions from LM4 under the LM4 amended and restated limited liability company agreement based on our ownership interest. For the three and nine months ended September 30, 2022 and 2021, we had the following activity related to our agreements with LM4: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Processing fee incurred $ 6.7 $ 8.0 $ 15.9 $ 22.0 Earnings from equity investments 2.8 3.0 4.2 8.6 Distributions received from equity investments 1.4 3.1 7.5 14.6 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 5. Property, Plant and Equipment Property, plant and equipment, at cost, is as follows: Estimated useful lives September 30, 2022 December 31, 2021 (in millions, except for number of years) Gathering assets Pipelines 22 years $ 1,572.1 $ 1,489.7 Compressors, pumping stations and terminals 22 to 25 years 921.7 809.0 Gas plant assets Pipelines, pipes and valves 22 to 25 years 460.0 460.0 Equipment 12 to 30 years 428.2 428.3 Processing and fractionation facilities 25 years 413.3 408.7 Buildings 35 years 182.3 182.3 Logistics facilities and railcars 20 to 25 years 386.7 386.5 Storage facilities 20 to 25 years 19.5 19.5 Other 20 to 25 years 25.4 25.8 Construction-in-progress N/A 101.7 131.6 Total property, plant and equipment, at cost 4,510.9 4,341.4 Accumulated depreciation ( 1,351.3 ) ( 1,216.4 ) Property, plant and equipment, net $ 3,159.6 $ 3,125.0 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities | Note 6. Accrued Liabilities Accrued liabilities are as follows: September 30, 2022 December 31, 2021 (in millions) Accrued interest $ 29.1 $ 30.9 Accrued capital expenditures 25.6 26.5 Other accruals 29.1 18.8 Total $ 83.8 $ 76.2 |
Debt and Interest Expense
Debt and Interest Expense | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt and Interest Expense | Note 7. Debt and Interest Expense Fixed‑Rate Senior Notes On April 8, 2022, the Partnership issued $ 400.0 million aggregate principal amount of 5.500 % fixed-rate senior unsecured notes due 2030 to qualified institutional investors. Interest is payable semi‑annually on April 15 and October 15, commencing October 15, 2022. The Partnership used the proceeds to repay the borrowings under its revolving credit facility used to finance the April 4, 2022, repurchase transaction (see Note 3, Equity Transactions ). As of September 30, 2022, the Partnership had $ 750.0 million aggregate principal amount of 4.250 % fixed‑rate senior unsecured notes due 2030 that were issued to qualified institutional investors. Interest is payable semi‑annually on February 15 and August 15. As of September 30, 2022, the Partnership also had $ 550.0 million aggregate principal amount of 5.125 % fixed‑rate senior unsecured notes due 2028 that were issued to qualified institutional investors. Interest is payable semi‑annually on June 15 and December 15. In addition, as of September 30, 2022, the Partnership had $ 800.0 million aggregate principal amount of 5.625 % fixed‑rate senior unsecured notes due 2026 that were issued to qualified institutional investors. Interest is payable semi‑annually on February 15 and August 15. The notes described above are guaranteed by certain subsidiaries of the Partnership. Each of the indentures for the senior unsecured notes described above contains customary covenants that restrict our ability and the ability of our restricted subsidiaries to (i) declare or pay any dividend or make any other restricted payments; (ii) transfer or sell assets or subsidiary stock; (iii) incur additional debt; or (iv) make restricted investments, unless, at the time of and immediately after giving pro forma effect to such restricted payments and any related incurrence of indebtedness or other transactions, no default has occurred and is continuing or would occur as a consequence of such restricted payment and if the leverage ratio does not exceed 4.25 to 1.00. As of September 30, 2022, we were in compliance with all debt covenants under the indentures. In addition, the covenants included in the indentures governing the senior unsecured notes contain provisions that allow the Company to satisfy the Partnership’s reporting obligations under the indenture, as long as any such financial information of the Company contains information reasonably sufficient to identify the material differences, if any, between the financial information of the Company, on the one hand, and the Partnership and its subsidiaries on a stand-alone basis, on the other hand and the Company does not directly own capital stock of any person other than the Partnership and its subsidiaries, or material business operations that would not be consolidated with the financial results of the Partnership and its subsidiaries. The Company is a holding company and has no independent assets or operations. Other than the interest in the Partnership and the effect of federal and state income taxes that are recognized at the Company level, there are no material differences between the consolidated financial statements of the Partnership and the consolidated financial statements of the Company. Credit Facilities On July 14, 2022, the Partnership amended and restated its existing credit agreement for its senior secured credit facilities (the “Credit Facilities”) consisting of a $ 1,000.0 million 5 -year revolving credit facility and a fully drawn $ 400.0 million 5 ‑year Term Loan A facility, resulting in an incremental $ 20.0 million outstanding on the term loan facility at September 30, 2022. The amended and restated Credit Facilities mature in July 2027 . Facility fees accrue on the total capacity of the revolving credit facility. Borrowings under the 5 -year Term Loan A facility generally bear interest at Secured Overnight Financing Rate (”SOFR”) plus the applicable margin ranging from 1.65 % to 2.55 %, while the applicable margin for the 5 ‑year syndicated revolving credit facility ranges from 1.375 % to 2.050 %. Pricing levels for the facility fee and interest rate margins are based on the Partnership’s ratio of total debt to EBITDA (as defined in the Credit Facilities). If the Partnership obtains an investment grade credit rating, the pricing levels will be based on the Partnership’s credit ratings in effect from time to time. At September 30, 2022, borrowings of $ 43.0 million were drawn and outstanding under the Partnership’s revolving credit facility, and borrowings of $ 400.0 m illion, excluding deferred issuance costs, were drawn and outstanding under the Partnership’s Term Loan A facility. The Credit Facilities can be used for borrowings and letters of credit for general corporate purposes. The Credit Facilities are guaranteed by each direct and indirect wholly owned material domestic subsidiary of the Partnership, and are secured by first priority perfected liens on substantially all of the presently owned and after-acquired assets of the Partnership and its direct and indirect wholly owned material domestic subsidiaries, including equity interests directly owned by such entities, subject to certain customary exclusions. The Credit Facilities contain representations and warranties, affirmative and negative covenants and events of default that the Partnership considers to be customary for an agreement of this type, including a covenant that requires the Partnership to maintain a ratio of total debt to EBITDA (as defined in the Credit Facilities) for the prior four fiscal quarters of not greater than 5.00 to 1.00 as of the last day of each fiscal quarter ( 5.50 to 1.00 during the specified period following certain acquisitions) and, prior to the Partnership obtaining an investment grade credit rating, a ratio of secured debt to EBITDA for the prior four fiscal quarters of not greater than 4.00 to 1.00 as of the last day of each fiscal quarter. As of September 30, 2022, the Partnership was in compliance with these financial covenants. Fair Value Measurement At September 30, 2022, our total debt had a carrying value of $ 2,909.0 million and had a fair value of approximately $ 2,641.3 million, based on Level 2 inputs in the fair value measurement hierarchy. The carrying value of the amounts under the Term Loan A facility and revolving credit facility at September 30, 2022, approximated their fair value. Any changes in interest rates do not impact cash outflows associated with fixed rate interest payments or settlement of debt principal, unless a debt instrument is repurchased prior to maturity. |
Partners' Capital and Distribut
Partners' Capital and Distributions | 9 Months Ended |
Sep. 30, 2022 | |
Partners' Capital Notes [Abstract] | |
Partners' Capital and Distributions | Note 8. Partners’ Capital and Distributions Our partnership agreement requires that, within 45 days after the end of each quarter, we distribute all of our available cash, as defined in the partnership agreement, to shareholders of record on the applicable record date. The following table details the distributions declared and/or paid for the periods presented: z Period Record Date Distribution Date Distribution per Class A share First Quarter 2021 May 3, 2021 May 13, 2021 $ 0.4526 Second Quarter 2021 August 9, 2021 August 13, 2021 $ 0.5042 Third Quarter 2021 November 4, 2021 November 12, 2021 $ 0.5104 Fourth Quarter 2021 February 3, 2022 February 14, 2022 $ 0.5167 First Quarter 2022 May 5, 2022 May 13, 2022 $ 0.5492 Second Quarter 2022 August 4, 2022 August 12, 2022 $ 0.5559 Third Quarter 2022 (1) November 3, 2022 November 14, 2022 $ 0.5627 (1) For more information, see Note 14, Subsequent Events. |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Note 9. Equity‑Based Compensation Equity‑based award activity for the nine months ended September 30, 2022 is as follows: Weighted Average Award Date Number of Shares Fair Value Outstanding and unvested shares at December 31, 2021 187,931 $ 16.75 Granted 53,548 33.52 Vested ( 95,778 ) 16.89 Outstanding and unvested shares at September 30, 2022 145,701 $ 22.82 As of September 30, 2022, $ 2.3 million of compensation cost related to unvested restricted shares awarded under our long-term incentive plan remains to be recognized over an expected weighted‑average period of 2.0 years. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note 10. Earnings per Share We calculate earnings per Class A Share as we do not have any other participating securities. Substantially all of income tax expense is attributed to earnings of Class A Shares reflective of our organizational structure. Class B Units of the Partnership together with the equal number of Class B Shares of the Company are convertible to Class A Shares of the Company on a one -for-one basis. In addition, our restricted equity-based awards may have a dilutive effect on our earnings per share. Diluted earnings per Class A Share are calculated using the “treasury stock method” or “if-converted method,” whichever is more dilutive. Three Months Ended September 30, Nine Months Ended September 30, (in millions, except per share amounts) 2022 2021 2022 2021 Net income $ 159.4 $ 131.1 $ 470.8 $ 452.7 Less: Net income attributable to noncontrolling interest 136.2 121.2 408.7 423.2 Net income attributable to Hess Midstream LP 23.2 9.9 62.1 29.5 Net income attributable to Hess Midstream LP Basic: $ 0.53 $ 0.39 $ 1.54 $ 1.27 Diluted: $ 0.53 $ 0.38 $ 1.52 $ 1.25 Weighted average Class A shares outstanding: Basic: 44.0 25.0 40.5 23.1 Diluted: 44.1 25.1 40.5 23.2 For the three and nine months ended September 30, 2022 the weighted average number of Class A shares outstanding included 58,300 and 70,262 dilutive restricted shares, respectively, compared with 99,697 and 99,889 dilutive restricted shares for the three and nine months ended September 30, 2021, respectively. |
Concentration of Credit Risk
Concentration of Credit Risk | 9 Months Ended |
Sep. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | Note 11. Concentration of Credit Risk Hess represented approximately 100 % of our total revenues and accounts receivable for the three and nine months ended September 30, 2022 and 2021. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Environmental Contingencies The Company is subject to federal, state and local laws and regulations relating to the environment. On August, 12, 2022, the Company became aware of a produced water release from an underground pipeline located approximately 8 miles north of Ray, North Dakota. At this time, it is estimated that approximately 34,000 barrels of produced water were released, causing impacts to soils, crops, and groundwater. While the Company is still in the initial phases of site investigation, the Company has recorded reserves for the estimated future costs to investigate and remediate any impacts of the release. As of September 30, 2022 our total reserves for all estimated remediation liabilities, inclusive of the produced water release above, in Accrued liabilities and Other noncurrent liabilities were $ 1.9 million and $ 7.2 million, respectively, compared with $ 0.8 million and $ 3.1 million, respectively, as of December 31, 2021. Legal Proceedings In the ordinary course of business, the Company is from time to time party to various judicial and administrative proceedings. We regularly assess the need for accounting recognition or disclosure of these contingencies. In the case of a known contingency, we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Company has not received any notice of litigation or regulatory enforcement in connection with the produced water release described under Environmental Contingencies above. Unless and until an enforcement action is started, the Company cannot fully predict the potential cost of such fines or penalties and what rights, claims, and defenses it may have. Based on currently available information, we believe it is remote that the outcome of known matters, including the produced water release described above, would have a material adverse impact on our financial condition, results of operations or cash flows. Accordingly, as of September 30, 2022 and December 31, 2021, we did no t have material accrued liabilities for legal contingencies. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segments | Note 13. Segments Our operations are located in the United States and are organized into three reportable segments: (1) gathering, (2) processing and storage and (3) terminaling and export. Our reportable segments comprise the structure used by our Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance. These segments are strategic business units with differing products and services. Our CODM evaluates the segments’ operating performance based on multiple measures including Adjusted EBITDA, defined as net income (loss) before net interest expense, income tax expense (benefit), depreciation and amortization and our proportional share of depreciation of equity affiliates, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance, such as transaction costs, other income and other non-cash, non‑recurring items, if applicable. The following tables reflect certain financial data for each reportable segment: Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated (in millions) For the Three Months Ended September 30, 2022 Revenues and other income $ 182.0 $ 121.7 $ 31.1 $ - $ 334.8 Net income (loss) 103.4 83.9 21.2 ( 49.1 ) 159.4 Net income (loss) attributable to 18.9 15.2 4.0 ( 14.9 ) 23.2 Depreciation expense 26.9 14.5 4.1 - 45.5 Proportional share of equity - 1.3 - - 1.3 Income from equity investments - 2.8 - - 2.8 Interest expense, net - - - 39.9 39.9 Income tax expense - - - 7.5 7.5 Adjusted EBITDA 130.3 99.7 25.3 ( 1.7 ) 253.6 Capital expenditures* 55.8 2.6 2.2 - 60.6 Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated (in millions) For the Three Months Ended September 30, 2021 Revenues and other income $ 157.3 $ 111.1 $ 35.5 $ - $ 303.9 Net income (loss) 91.7 45.0 26.9 ( 32.5 ) 131.1 Net income (loss) attributable to 8.7 4.5 2.5 ( 5.8 ) 9.9 Depreciation expense 25.4 12.0 4.1 - 41.5 Proportional share of equity - 1.3 - - 1.3 Income from equity investments - 3.0 - - 3.0 Interest expense, net - - - 28.0 28.0 Income tax expense - - - 3.1 3.1 Adjusted EBITDA 117.1 58.3 31.0 ( 1.4 ) 205.0 Capital expenditures* 45.4 13.7 - - 59.1 Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated (in millions) For the Nine Months Ended September 30, 2022 Revenues and other income $ 511.8 $ 352.0 $ 96.8 $ - $ 960.6 Net income (loss) 296.8 243.3 64.4 ( 133.7 ) 470.8 Net income (loss) attributable to 49.5 40.6 10.7 ( 38.7 ) 62.1 Depreciation expense 79.4 43.3 12.2 - 134.9 Proportional share of equity affiliates' depreciation - 3.9 - - 3.9 Income from equity investments - 4.2 - - 4.2 Interest expense, net - - - 108.6 108.6 Income tax expense - - - 19.6 19.6 Adjusted EBITDA 376.2 290.5 76.6 ( 5.5 ) 737.8 Capital expenditures* 159.2 4.8 5.4 - 169.4 Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated (in millions) For the Nine Months Ended September 30, 2021 Revenues and other income $ 464.6 $ 319.9 $ 103.0 $ - $ 887.5 Net income (loss) 276.5 187.5 77.0 ( 88.3 ) 452.7 Net income (loss) attributable to 23.2 15.6 6.5 ( 15.8 ) 29.5 Depreciation expense 75.5 34.4 12.2 - 122.1 Proportional share of equity affiliates' depreciation - 3.9 - - 3.9 Income from equity investments - 8.6 - - 8.6 Interest expense, net - - - 74.0 74.0 Income tax expense (benefit) - - - 9.2 9.2 Adjusted EBITDA 352.0 225.8 89.2 ( 5.1 ) 661.9 Capital expenditures* 103.0 25.5 0.1 - 128.6 * Includes acquisition, expansion and maintenance capital expenditures, as applicable. Total assets for the reportable segments are as follows: September 30, 2022 December 31, 2021 (in millions) Gathering $ 2,016.1 $ 1,927.0 Processing and Storage (1) 1,112.5 1,149.5 Terminaling and Export 274.2 281.4 Interest and Other 198.7 127.7 Total assets $ 3,601.5 $ 3,485.6 (1) Includes investment in equity investees of $ 98.3 million as of September 30, 2022 and $ 101.6 million as of December 31, 2021. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14. Subsequent Events On October 24, 2022 , the board of directors of our general partner declared a quarterly cash distribution of $ 0.5627 per Class A share for the quarter ended September 30, 2022, an approximate 1.2 % increase compared to the distribution on the Class A shares for the quarter ended June 30, 2022. The distribution will be payable on November 14, 2022 , to shareholders of record as of the close of business on November 3, 2022 . Simultaneously, the Partnership will make a distribution of $ 0.5627 per Class B unit of the Partnership to the Sponsors. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Presentation | The consolidated financial statements included in this report reflect all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of our consolidated financial position at September 30, 2022 and December 31, 2021, the consolidated results of operations for the three and nine months ended September 30, 2022 and 2021, and the consolidated cash flows for the nine months ended September 30, 2022 and 2021. The Company has no items of other comprehensive income (loss); therefore, net income (loss) is equal to comprehensive income (loss). The unaudited results of operations for the interim periods reported are not necessarily indicative of results to be expected for the full year. The consolidated financial statements were prepared in accordance with the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain notes or other financial information that are normally required by U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted from these interim consolidated financial statements. These financial statements, therefore, should be read in conjunction with the financial statements and related notes included in the Company’s annual report on Form 10‑K for the year ended December 31, 2021. We consolidate the activities of Hess Midstream Operations LP (“the Partnership”), as a variable interest entity (“VIE”) under U.S. GAAP. We have concluded that we are the primary beneficiary of the VIE, as defined in the accounting standards, since we have the power, through our ownership, to direct those activities that most significantly impact the economic performance of the Partnership. This conclusion was based on a qualitative analysis that considered the Partnership’s governance structure and the delegation of control provisions, which provide us the ability to control the operations of the Partnership. All financial statement activities associated with the VIE are captured within gathering, processing and storage, and terminaling and export segments (see Note 13, Segments ). We currently do not have any independent assets or operations other than our interest in the Partnership. Our noncontrolling interest represents the approximate 81.7 % interest in the Partnership retained by Hess and GIP at September 30, 2022 ( 86.7 % at December 31, 2021). See Note 3, Equity Transactions for a description of changes in noncontrolling interest related to the equity transactions. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Summary of Revenues From Contracts With Customers on Disaggregated Basis | Revenues from contracts with customers on a disaggregated basis are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Oil and gas gathering services $ 160.5 $ 135.3 $ 454.2 $ 397.4 Processing and storage services 121.7 111.1 352.0 319.9 Terminaling and export services 30.5 35.5 95.5 103.0 Water gathering and disposal services 21.5 22.0 57.6 67.2 Total revenues from contracts with customers $ 334.2 $ 303.9 $ 959.3 $ 887.5 Other income 0.6 - 1.3 - Total revenues $ 334.8 $ 303.9 $ 960.6 $ 887.5 |
Summary of MVC Shortfall Fees Earned | The following table presents MVC shortfall fees earned during each period: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Oil and gas gathering services $ 20.1 $ 13.3 $ 71.9 $ 30.2 Processing and storage services - 4.4 22.8 4.4 Terminaling and export services 6.9 11.9 23.5 24.6 Water gathering and disposal services - 2.0 0.4 4.5 Total $ 27.0 $ 31.6 $ 118.6 $ 63.7 |
Summary of Third-party Pass-through Costs for Which Revenues in Amount Equal to Costs are Recognized and Classification of Charges between Operating and Maintenance Expenses and General and Administrative Expenses | The following table presents third-party pass-through costs for which we recognize revenues in an amount equal to the costs. These third-party costs are included in Operating and maintenance expenses in the accompanying unaudited consolidated statements of operations. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Electricity and other related fees $ 12.7 $ 19.7 $ 35.2 $ 38.9 Produced water trucking and disposal costs 9.4 9.0 25.2 27.1 Rail transportation costs - - 4.3 0.1 Total $ 22.1 $ 28.7 $ 64.7 $ 66.1 For the three and nine months ended September 30, 2022 and 2021, we had the following charges from Hess. The classification of these charges between operating and maintenance expenses and general and administrative expenses is based on the fundamental nature of the services being performed for our operations. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Operating and maintenance expenses $ 17.8 $ 16.7 $ 51.4 $ 48.2 General and administrative expenses 4.0 3.7 11.5 11.5 Total $ 21.8 $ 20.4 $ 62.9 $ 59.7 |
Summary of Activity Related to Agreements with Related Party | For the three and nine months ended September 30, 2022 and 2021, we had the following activity related to our agreements with LM4: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Processing fee incurred $ 6.7 $ 8.0 $ 15.9 $ 22.0 Earnings from equity investments 2.8 3.0 4.2 8.6 Distributions received from equity investments 1.4 3.1 7.5 14.6 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Components of Property, Plant and Equipment | Property, plant and equipment, at cost, is as follows: Estimated useful lives September 30, 2022 December 31, 2021 (in millions, except for number of years) Gathering assets Pipelines 22 years $ 1,572.1 $ 1,489.7 Compressors, pumping stations and terminals 22 to 25 years 921.7 809.0 Gas plant assets Pipelines, pipes and valves 22 to 25 years 460.0 460.0 Equipment 12 to 30 years 428.2 428.3 Processing and fractionation facilities 25 years 413.3 408.7 Buildings 35 years 182.3 182.3 Logistics facilities and railcars 20 to 25 years 386.7 386.5 Storage facilities 20 to 25 years 19.5 19.5 Other 20 to 25 years 25.4 25.8 Construction-in-progress N/A 101.7 131.6 Total property, plant and equipment, at cost 4,510.9 4,341.4 Accumulated depreciation ( 1,351.3 ) ( 1,216.4 ) Property, plant and equipment, net $ 3,159.6 $ 3,125.0 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities are as follows: September 30, 2022 December 31, 2021 (in millions) Accrued interest $ 29.1 $ 30.9 Accrued capital expenditures 25.6 26.5 Other accruals 29.1 18.8 Total $ 83.8 $ 76.2 |
Partners' Capital and Distrib_2
Partners' Capital and Distributions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Partners' Capital Notes [Abstract] | |
Schedule of Distributions Declared and Paid | The following table details the distributions declared and/or paid for the periods presented: z Period Record Date Distribution Date Distribution per Class A share First Quarter 2021 May 3, 2021 May 13, 2021 $ 0.4526 Second Quarter 2021 August 9, 2021 August 13, 2021 $ 0.5042 Third Quarter 2021 November 4, 2021 November 12, 2021 $ 0.5104 Fourth Quarter 2021 February 3, 2022 February 14, 2022 $ 0.5167 First Quarter 2022 May 5, 2022 May 13, 2022 $ 0.5492 Second Quarter 2022 August 4, 2022 August 12, 2022 $ 0.5559 Third Quarter 2022 (1) November 3, 2022 November 14, 2022 $ 0.5627 (1) For more information, see Note 14, Subsequent Events. |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Equity-based Award Activity | Equity‑based award activity for the nine months ended September 30, 2022 is as follows: Weighted Average Award Date Number of Shares Fair Value Outstanding and unvested shares at December 31, 2021 187,931 $ 16.75 Granted 53,548 33.52 Vested ( 95,778 ) 16.89 Outstanding and unvested shares at September 30, 2022 145,701 $ 22.82 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings per Share | We calculate earnings per Class A Share as we do not have any other participating securities. Substantially all of income tax expense is attributed to earnings of Class A Shares reflective of our organizational structure. Class B Units of the Partnership together with the equal number of Class B Shares of the Company are convertible to Class A Shares of the Company on a one -for-one basis. In addition, our restricted equity-based awards may have a dilutive effect on our earnings per share. Diluted earnings per Class A Share are calculated using the “treasury stock method” or “if-converted method,” whichever is more dilutive. Three Months Ended September 30, Nine Months Ended September 30, (in millions, except per share amounts) 2022 2021 2022 2021 Net income $ 159.4 $ 131.1 $ 470.8 $ 452.7 Less: Net income attributable to noncontrolling interest 136.2 121.2 408.7 423.2 Net income attributable to Hess Midstream LP 23.2 9.9 62.1 29.5 Net income attributable to Hess Midstream LP Basic: $ 0.53 $ 0.39 $ 1.54 $ 1.27 Diluted: $ 0.53 $ 0.38 $ 1.52 $ 1.25 Weighted average Class A shares outstanding: Basic: 44.0 25.0 40.5 23.1 Diluted: 44.1 25.1 40.5 23.2 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Financial Data for Each Reportable Segment | The following tables reflect certain financial data for each reportable segment: Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated (in millions) For the Three Months Ended September 30, 2022 Revenues and other income $ 182.0 $ 121.7 $ 31.1 $ - $ 334.8 Net income (loss) 103.4 83.9 21.2 ( 49.1 ) 159.4 Net income (loss) attributable to 18.9 15.2 4.0 ( 14.9 ) 23.2 Depreciation expense 26.9 14.5 4.1 - 45.5 Proportional share of equity - 1.3 - - 1.3 Income from equity investments - 2.8 - - 2.8 Interest expense, net - - - 39.9 39.9 Income tax expense - - - 7.5 7.5 Adjusted EBITDA 130.3 99.7 25.3 ( 1.7 ) 253.6 Capital expenditures* 55.8 2.6 2.2 - 60.6 Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated (in millions) For the Three Months Ended September 30, 2021 Revenues and other income $ 157.3 $ 111.1 $ 35.5 $ - $ 303.9 Net income (loss) 91.7 45.0 26.9 ( 32.5 ) 131.1 Net income (loss) attributable to 8.7 4.5 2.5 ( 5.8 ) 9.9 Depreciation expense 25.4 12.0 4.1 - 41.5 Proportional share of equity - 1.3 - - 1.3 Income from equity investments - 3.0 - - 3.0 Interest expense, net - - - 28.0 28.0 Income tax expense - - - 3.1 3.1 Adjusted EBITDA 117.1 58.3 31.0 ( 1.4 ) 205.0 Capital expenditures* 45.4 13.7 - - 59.1 Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated (in millions) For the Nine Months Ended September 30, 2022 Revenues and other income $ 511.8 $ 352.0 $ 96.8 $ - $ 960.6 Net income (loss) 296.8 243.3 64.4 ( 133.7 ) 470.8 Net income (loss) attributable to 49.5 40.6 10.7 ( 38.7 ) 62.1 Depreciation expense 79.4 43.3 12.2 - 134.9 Proportional share of equity affiliates' depreciation - 3.9 - - 3.9 Income from equity investments - 4.2 - - 4.2 Interest expense, net - - - 108.6 108.6 Income tax expense - - - 19.6 19.6 Adjusted EBITDA 376.2 290.5 76.6 ( 5.5 ) 737.8 Capital expenditures* 159.2 4.8 5.4 - 169.4 Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated (in millions) For the Nine Months Ended September 30, 2021 Revenues and other income $ 464.6 $ 319.9 $ 103.0 $ - $ 887.5 Net income (loss) 276.5 187.5 77.0 ( 88.3 ) 452.7 Net income (loss) attributable to 23.2 15.6 6.5 ( 15.8 ) 29.5 Depreciation expense 75.5 34.4 12.2 - 122.1 Proportional share of equity affiliates' depreciation - 3.9 - - 3.9 Income from equity investments - 8.6 - - 8.6 Interest expense, net - - - 74.0 74.0 Income tax expense (benefit) - - - 9.2 9.2 Adjusted EBITDA 352.0 225.8 89.2 ( 5.1 ) 661.9 Capital expenditures* 103.0 25.5 0.1 - 128.6 * Includes acquisition, expansion and maintenance capital expenditures, as applicable. |
Total Assets for Reportable Segments | Total assets for the reportable segments are as follows: September 30, 2022 December 31, 2021 (in millions) Gathering $ 2,016.1 $ 1,927.0 Processing and Storage (1) 1,112.5 1,149.5 Terminaling and Export 274.2 281.4 Interest and Other 198.7 127.7 Total assets $ 3,601.5 $ 3,485.6 (1) Includes investment in equity investees of $ 98.3 million as of September 30, 2022 and $ 101.6 million as of December 31, 2021. |
Description of Business - Addit
Description of Business - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2022 Segment | |
Description Of Business [Line Items] | |
Number of reportable segments | 3 |
Hess | |
Description Of Business [Line Items] | |
Percentage of ownership in joint venture | 50% |
GIP II Blue Holding, L.P | |
Description Of Business [Line Items] | |
Percentage of ownership in joint venture | 50% |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Hess and GIP | ||
Accounting Policies [Line Items] | ||
Noncontrolling interest percentage | 81.70% | 86.70% |
Equity Transactions - Additiona
Equity Transactions - Additional Information (Detail) - USD ($) | 9 Months Ended | ||||||||
Apr. 04, 2022 | Mar. 29, 2022 | Jul. 27, 2021 | Mar. 15, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Apr. 08, 2022 | Dec. 31, 2021 | Aug. 10, 2021 | |
Class of Stock [Line Items] | |||||||||
Costs incurred to repurchase shares were charged to equity | $ 1,500,000 | $ 2,200,000 | |||||||
5.500% Fixed Rate Senior Unsecured Notes due 2030 | |||||||||
Class of Stock [Line Items] | |||||||||
Fixed-rate senior notes | $ 400,000,000 | ||||||||
4.250% Senior Notes Due 2030 | |||||||||
Class of Stock [Line Items] | |||||||||
Fixed-rate senior notes | $ 750,000,000 | ||||||||
Class A Shares | |||||||||
Class of Stock [Line Items] | |||||||||
Equity offering transaction | 10,235,000 | 6,900,000 | |||||||
Shares issued, price per share | $ 29.50 | $ 21 | |||||||
Proceeds from Issuance of public equity offering | $ 0 | ||||||||
Net proceeds received by sponsors from public equity offering | 291,700,000 | $ 139,900,000 | |||||||
Increase (decrease) common unitholders | $ 27,000,000 | $ (31,800,000) | 247,800,000 | $ 204,100,000 | |||||
Additions to deferred tax asset | $ 86,400,000 | $ 41,200,000 | |||||||
Class A Shares | Maximum | |||||||||
Class of Stock [Line Items] | |||||||||
Underwriters’ option to purchase additional shares | 1,335,000 | 900,000 | |||||||
Class B Shares | |||||||||
Class of Stock [Line Items] | |||||||||
Repurchase of shares | 13,559,322 | 15,625,000 | |||||||
Value of shares repurchased | $ 400,000,000 | $ 750,000,000 | |||||||
Stock purchased price per share | $ 29.50 | $ 24 | |||||||
Percentage of discount on purchase price per share | 4% |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
LM4 | ||||
Related Party Transaction [Line Items] | ||||
Percentage of ownership in joint venture | 50% | 50% | ||
Customer Concentration Risk | Revenue | ||||
Related Party Transaction [Line Items] | ||||
Revenues attributable to fee based commercial agreements | 100% | 100% | ||
Hess | ||||
Related Party Transaction [Line Items] | ||||
Percentage of ownership in joint venture | 50% | 50% | ||
Hess | Customer Concentration Risk | Revenue | ||||
Related Party Transaction [Line Items] | ||||
Revenues attributable to fee based commercial agreements | 100% | 100% | 100% | 100% |
Hess | Amended and Restated Commercial Agreement | ||||
Related Party Transaction [Line Items] | ||||
Minimum volume commitments, Description | Minimum volume commitments (“MVCs”) are equal to 80% of Hess’ nominations in each development plan that apply on a three-year rolling basis such that MVCs are set for the three years following the most recent nomination. Without our consent, the MVCs resulting from the nominated volumes for any quarter or year contained in any prior development plan shall not be reduced by any updated development plan unless dedicated production is released by us. The applicable MVCs may, however, be increased as a result of the nominations contained in any such updated development plan. | |||
Minimum volume commitments expressed as percentage of related party nominations in development plans | 80% | |||
Initial term of agreement | 10 years | |||
Agreement description | each of our commercial agreements with Hess has an initial 10-year term effective January 1, 2014 (“Initial Term”). | |||
Number of rights to extend the term of agreement | one | |||
Advance period to call for extension of term of agreement | 3 years | |||
Secondary term of agreement | 10 years | |||
Hess | Amended and Restated Agreement for Certain Gas Gathering Sub-system | ||||
Related Party Transaction [Line Items] | ||||
Initial term of agreement | 15 years | |||
Agreement description | For this gathering sub-system, the Initial Term is 15 years effective January 1, 2014 and for the water services agreements the Initial Term is 14 years effective January 1, 2019. | |||
Secondary term of agreement | 5 years | |||
Hess | Amended and Restated Water Services Agreements | ||||
Related Party Transaction [Line Items] | ||||
Initial term of agreement | 14 years | |||
Secondary term of agreement | 10 years | |||
Hess | Terminal and Export Services Agreement | ||||
Related Party Transaction [Line Items] | ||||
Commercial agreement period | 20 years | |||
Hess | Commercial Agreements Other Than Storage Services Agreement and Terminal and Export Services Agreement | ||||
Related Party Transaction [Line Items] | ||||
Minimum volume commitments, Description | During the Secondary Term of our commercial agreements, Hess will continue to have MVCs equal to 80% of Hess’ nominations in each development plan that apply on a three-year rolling basis through the Secondary Term. | |||
Minimum volume commitments expressed as percentage of related party nominations in development plans | 80% | |||
Maximum consumer price index percentage | 3% | |||
Fee recalculation model description | the fee recalculation model under each applicable agreement will be replaced by an inflation-based fee structure. The initial fee for the first year of the Secondary Term will be determined based on the average fees paid by Hess under the applicable agreement during the last three years of the Initial Term (with such fees adjusted for inflation through the first year of the Secondary Term). For each year following the first year of the Secondary Term, the applicable fee will be adjusted annually based on the percentage change in the consumer price index, provided that we may not increase any fee by more than 3% in any calendar year solely by reason of an increase in the consumer price index, and no fee will ever be reduced below the amount of the applicable fee payable by Hess in the prior year as a result of a decrease in the consumer price index. | |||
Targa Resources Corp. | LM4 | ||||
Related Party Transaction [Line Items] | ||||
Percentage of ownership in joint venture | 50% | 50% |
Related Party Transactions - Su
Related Party Transactions - Summary of Revenues From Contracts With Customers on Disaggregated Basis (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation Of Revenue [Line Items] | ||||
Revenue from contract with customer including assessed tax | $ 334.2 | $ 303.9 | $ 959.3 | $ 887.5 |
Other income | 0.6 | 1.3 | ||
Total revenues | 334.8 | 303.9 | 960.6 | 887.5 |
Oil and Gas Gathering Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue from contract with customer including assessed tax | 160.5 | 135.3 | 454.2 | 397.4 |
Processing and Storage Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue from contract with customer including assessed tax | 121.7 | 111.1 | 352 | 319.9 |
Terminaling and Export Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue from contract with customer including assessed tax | 30.5 | 35.5 | 95.5 | 103 |
Water Gathering and Disposal Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue from contract with customer including assessed tax | $ 21.5 | $ 22 | $ 57.6 | $ 67.2 |
Related Party Transactions - _2
Related Party Transactions - Summary of MVC Shortfall Fees Earned (Detail) - Hess - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | ||||
Total MVC shortfall fees | $ 27 | $ 31.6 | $ 118.6 | $ 63.7 |
Oil and Gas Gathering Services | ||||
Related Party Transaction [Line Items] | ||||
Total MVC shortfall fees | 20.1 | 13.3 | 71.9 | 30.2 |
Processing and Storage Services | ||||
Related Party Transaction [Line Items] | ||||
Total MVC shortfall fees | 4.4 | 22.8 | 4.4 | |
Terminaling and Export Services | ||||
Related Party Transaction [Line Items] | ||||
Total MVC shortfall fees | $ 6.9 | 11.9 | 23.5 | 24.6 |
Water Gathering and Disposal Services | ||||
Related Party Transaction [Line Items] | ||||
Total MVC shortfall fees | $ 2 | $ 0.4 | $ 4.5 |
Related Party Transactions - _3
Related Party Transactions - Summary of Third-party Pass-through Costs for Which Revenues in Amount Equal to Costs are Recognized (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | ||||
Reimbursement revenue | $ 334.2 | $ 303.9 | $ 959.3 | $ 887.5 |
Hess | ||||
Related Party Transaction [Line Items] | ||||
Total | 22.1 | 28.7 | 64.7 | 66.1 |
Hess | Electricity and Other Related Fees | ||||
Related Party Transaction [Line Items] | ||||
Reimbursement revenue | 12.7 | 19.7 | 35.2 | 38.9 |
Hess | Produced Water Trucking and Disposal Costs | ||||
Related Party Transaction [Line Items] | ||||
Reimbursement revenue | $ 9.4 | $ 9 | 25.2 | 27.1 |
Hess | Rail Transportation Costs | ||||
Related Party Transaction [Line Items] | ||||
Reimbursement revenue | $ 4.3 | $ 0.1 |
Related Party Transactions - _4
Related Party Transactions - Summary of Classification of Charges between Operating and Maintenance Expenses and General and Administrative Expenses (Detail) - Hess - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | ||||
Operating and maintenance expenses | $ 17.8 | $ 16.7 | $ 51.4 | $ 48.2 |
General and administrative expenses | 4 | 3.7 | 11.5 | 11.5 |
Total | $ 21.8 | $ 20.4 | $ 62.9 | $ 59.7 |
Related Party Transactions - _5
Related Party Transactions - Summary of Activity Related to Agreements with Related Party (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | ||||
Earnings from equity investments | $ 2.8 | $ 3 | $ 4.2 | $ 8.6 |
Distributions received from equity investments | 7.5 | 14.6 | ||
LM4 | ||||
Related Party Transaction [Line Items] | ||||
Processing fee incurred | 6.7 | 8 | 15.9 | 22 |
Earnings from equity investments | 2.8 | 3 | 4.2 | 8.6 |
Distributions received from equity investments | $ 1.4 | $ 3.1 | $ 7.5 | $ 14.6 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Property, Plant and Equipment (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, at cost | $ 4,510.9 | $ 4,341.4 |
Accumulated depreciation | (1,351.3) | (1,216.4) |
Property, plant and equipment, net | 3,159.6 | 3,125 |
Logistics Facilities and Railcars | ||
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, at cost | $ 386.7 | 386.5 |
Logistics Facilities and Railcars | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 20 years | |
Logistics Facilities and Railcars | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 25 years | |
Storage Facilities | ||
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, at cost | $ 19.5 | 19.5 |
Storage Facilities | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 20 years | |
Storage Facilities | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 25 years | |
Other | ||
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, at cost | $ 25.4 | 25.8 |
Other | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 20 years | |
Other | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 25 years | |
Construction-In-Progress | ||
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, at cost | $ 101.7 | 131.6 |
Gathering Assets | Pipelines | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 22 years | |
Total property, plant and equipment, at cost | $ 1,572.1 | 1,489.7 |
Gathering Assets | Compressors, Pumping Stations and Terminals | ||
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, at cost | $ 921.7 | 809 |
Gathering Assets | Compressors, Pumping Stations and Terminals | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 22 years | |
Gathering Assets | Compressors, Pumping Stations and Terminals | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 25 years | |
Gas Plant Assets | Pipelines, Pipes and Valves | ||
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, at cost | $ 460 | 460 |
Gas Plant Assets | Pipelines, Pipes and Valves | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 22 years | |
Gas Plant Assets | Pipelines, Pipes and Valves | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 25 years | |
Gas Plant Assets | Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, at cost | $ 428.2 | 428.3 |
Gas Plant Assets | Equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 12 years | |
Gas Plant Assets | Equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 30 years | |
Gas Plant Assets | Processing and Fractionation Facilities | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 25 years | |
Total property, plant and equipment, at cost | $ 413.3 | 408.7 |
Gas Plant Assets | Buildings | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, Estimated useful life | 35 years | |
Total property, plant and equipment, at cost | $ 182.3 | $ 182.3 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Accrued Liabilities, Current [Abstract] | ||
Accrued interest | $ 29.1 | $ 30.9 |
Accrued capital expenditures | 25.6 | 26.5 |
Other accruals | 29.1 | 18.8 |
Total | $ 83.8 | $ 76.2 |
Debt and Interest Expense - Add
Debt and Interest Expense - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Apr. 08, 2022 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | ||
Debt covenant, leverage ratio | 550% | |
Ratio of debt to EBITDA | 500% | |
Secured leverage ratio - Maximum | 400% | |
Debt instrument covenant, description | The Credit Facilities contain representations and warranties, affirmative and negative covenants and events of default that the Partnership considers to be customary for an agreement of this type, including a covenant that requires the Partnership to maintain a ratio of total debt to EBITDA (as defined in the Credit Facilities) for the prior four fiscal quarters of not greater than 5.00 to 1.00 as of the last day of each fiscal quarter (5.50 to 1.00 during the specified period following certain acquisitions) and, prior to the Partnership obtaining an investment grade credit rating, a ratio of secured debt to EBITDA for the prior four fiscal quarters of not greater than 4.00 to 1.00 as of the last day of each fiscal quarter. | |
Carrying Value | ||
Debt Instrument [Line Items] | ||
Total debt | $ 2,909,000,000 | |
Level 2 | ||
Debt Instrument [Line Items] | ||
Total debt fair value | $ 2,641,300,000 | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility - Term | 5 years | |
Maximum borrowing capacity | $ 1,000,000,000 | |
Borrowings | $ 43,000,000 | |
Revolving Credit Facility | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate applicable margin | 1.65% | |
Revolving Credit Facility | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate applicable margin | 2.55% | |
Term Loan A Facility | ||
Debt Instrument [Line Items] | ||
Credit facility - Term | 5 years | |
Credit facility - maturity year | 2027 | |
Maximum borrowing capacity | $ 400,000,000 | |
Borrowings | 400,000,000 | |
Increase of outstanding term loan facility | $ 20,000,000 | |
Syndicated Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility - Term | 5 years | |
Syndicated Revolving Credit Facility | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate applicable margin | 1.375% | |
Syndicated Revolving Credit Facility | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate applicable margin | 2.05% | |
Fixed-Rate Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt covenant, leverage ratio | 425% | |
5.500% Fixed Rate Senior Unsecured Notes due 2030 | ||
Debt Instrument [Line Items] | ||
Aggregate principal amount of fixed-rate senior notes | $ 400,000,000 | |
5.500% Fixed Rate Senior Unsecured Notes due 2030 | Fixed-Rate Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 5.50% | |
Debt instrument due year | 2030 | |
Frequency of periodic interest payment | semi‑annually | |
Interest payment terms | Interest is payable semi‑annually on April 15 and October 15, commencing October 15, 2022. | |
4.250% Fixed Rate Senior Unsecured Notes due 2030 | ||
Debt Instrument [Line Items] | ||
Aggregate principal amount of fixed-rate senior notes | $ 750,000,000 | |
4.250% Fixed Rate Senior Unsecured Notes due 2030 | Fixed-Rate Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 4.25% | |
Debt instrument due year | 2030 | |
Frequency of periodic interest payment | semi‑annually | |
Interest payment terms | Interest is payable semi‑annually on February 15 and August 15. | |
5.625% Fixed Rate Senior Unsecured Notes due 2026 | ||
Debt Instrument [Line Items] | ||
Aggregate principal amount of fixed-rate senior notes | $ 800,000,000 | |
5.625% Fixed Rate Senior Unsecured Notes due 2026 | Fixed-Rate Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 5.625% | |
Debt instrument due year | 2026 | |
Frequency of periodic interest payment | semi‑annually | |
Interest payment terms | Interest is payable semi‑annually on February 15 and August 15. | |
5.125% Fixed Rate Senior Unsecured Notes due 2028 | ||
Debt Instrument [Line Items] | ||
Aggregate principal amount of fixed-rate senior notes | $ 550,000,000 | |
5.125% Fixed Rate Senior Unsecured Notes due 2028 | Fixed-Rate Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 5.125% | |
Debt instrument due year | 2028 | |
Frequency of periodic interest payment | semi‑annually | |
Interest payment terms | Interest is payable semi‑annually on June 15 and December 15. |
Partners' Capital and Distrib_3
Partners' Capital and Distributions - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2022 | |
Partners' Capital Notes [Abstract] | |
Period of cash distribution to shareholders | 45 days |
Partners' Capital and Distrib_4
Partners' Capital and Distributions - Schedule of Distributions Declared and Paid (Detail) - $ / shares | 9 Months Ended | ||
Oct. 24, 2022 | Sep. 30, 2022 | ||
Distribution Made To Limited Partner [Line Items] | |||
Record Date | Nov. 03, 2022 | ||
Distribution Date | Nov. 14, 2022 | ||
First Quarter 2021 | |||
Distribution Made To Limited Partner [Line Items] | |||
Record Date | May 03, 2021 | ||
Distribution Date | May 13, 2021 | ||
Distribution per Class A share | $ 0.4526 | ||
Second Quarter 2021 | |||
Distribution Made To Limited Partner [Line Items] | |||
Record Date | Aug. 09, 2021 | ||
Distribution Date | Aug. 13, 2021 | ||
Distribution per Class A share | $ 0.5042 | ||
Third Quarter 2021 | |||
Distribution Made To Limited Partner [Line Items] | |||
Record Date | Nov. 04, 2021 | ||
Distribution Date | Nov. 12, 2021 | ||
Distribution per Class A share | $ 0.5104 | ||
Fourth Quarter 2021 | |||
Distribution Made To Limited Partner [Line Items] | |||
Record Date | Feb. 03, 2022 | ||
Distribution Date | Feb. 14, 2022 | ||
Distribution per Class A share | $ 0.5167 | ||
First Quarter 2022 | |||
Distribution Made To Limited Partner [Line Items] | |||
Record Date | May 05, 2022 | ||
Distribution Date | May 13, 2022 | ||
Distribution per Class A share | $ 0.5492 | ||
Second Quarter 2022 | |||
Distribution Made To Limited Partner [Line Items] | |||
Record Date | Aug. 04, 2022 | ||
Distribution Date | Aug. 12, 2022 | ||
Distribution per Class A share | $ 0.5559 | ||
Third Quarter 2022 | |||
Distribution Made To Limited Partner [Line Items] | |||
Record Date | [1] | Nov. 03, 2022 | |
Distribution Date | [1] | Nov. 14, 2022 | |
Distribution per Class A share | [1] | $ 0.5627 | |
[1] For more information, see Note 14, Subsequent Events. |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of Equity-based Award Activity (Detail) - Restricted Share | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Outstanding and unvested shares at December 31, 2021, Number of Shares | shares | 187,931 |
Granted, Number of Shares | shares | 53,548 |
Vested, Number of Shares | shares | (95,778) |
Outstanding and unvested shares at March 31, 2022, Number of Shares | shares | 145,701 |
Outstanding and unvested shares at December 31, 2021, Weighted Average Award Date Fair Value | $ / shares | $ 16.75 |
Granted, Weighted Average Award Date Fair Value | $ / shares | 33.52 |
Vested, Weighted Average Award Date Fair Value | $ / shares | 16.89 |
Outstanding and unvested shares at March 31, 2022, Weighted Average Award Date Fair Value | $ / shares | $ 22.82 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Detail) - Restricted Share $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Cost related to restricted shares to be recognized | $ 2.3 |
Cost related to unvested restricted shares to be recognized, over an expected weighted-average period | 2 years |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) - Class A Shares - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Dilutive Restricted Shares | ||||
Limited Partners Capital Account [Line Items] | ||||
Weighted average number shares | 58,300 | 99,697 | 70,262 | 99,889 |
Hess and GIP | ||||
Limited Partners Capital Account [Line Items] | ||||
Conversion of Class B units and Class B shares into Class A shares | 100% |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Earnings per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Limited Partners Capital Account [Line Items] | ||||||||
Net income | $ 159.4 | $ 151.8 | $ 159.6 | $ 131.1 | $ 162 | $ 159.6 | $ 470.8 | $ 452.7 |
Less: Net income attributable to noncontrolling interest | 136.2 | 121.2 | 408.7 | 423.2 | ||||
Net income attributable to Hess Midstream LP | $ 23.2 | $ 9.9 | $ 62.1 | $ 29.5 | ||||
Class A Shares | ||||||||
Net income attributable to Hess Midstream LP per Class A share: | ||||||||
Net income attributable to Hess Midstream LP per Class A share, Basic | $ 0.53 | $ 0.39 | $ 1.54 | $ 1.27 | ||||
Net income attributable to Hess Midstream LP per Class A share, Diluted | $ 0.53 | $ 0.38 | $ 1.52 | $ 1.25 | ||||
Weighted average Class A shares outstanding | ||||||||
Weighted average Class A shares outstanding, Basic | 44 | 25 | 40.5 | 23.1 | ||||
Weighted average Class A shares outstanding, Diluted | 44.1 | 25.1 | 40.5 | 23.2 |
Concentration of Credit Risk -
Concentration of Credit Risk - Additional Information (Detail) - Customer Concentration Risk | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 100% | 100% |
Revenue | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 100% | 100% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 9 Months Ended | |
Sep. 30, 2022 USD ($) Barrels | Dec. 31, 2021 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
No of produced water released | Barrels | 34,000 | |
Estimated remediation liabilities included in accrued liabilities | $ 1,900,000 | $ 800,000 |
Estimated remediation liabilities included in other noncurrent liabilities | 7,200,000 | 3,100,000 |
Accrued liabilities for legal contingencies | $ 0 | $ 0 |
Segments - Additional Informati
Segments - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2022 Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segments - Financial Data for E
Segments - Financial Data for Each Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Segment Reporting Information [Line Items] | |||||||||
Revenues and other income | $ 334.8 | $ 303.9 | $ 960.6 | $ 887.5 | |||||
Net income (loss) | 159.4 | $ 151.8 | $ 159.6 | 131.1 | $ 162 | $ 159.6 | 470.8 | 452.7 | |
Net income (loss) attributable to Hess Midstream LP | 23.2 | 9.9 | 62.1 | 29.5 | |||||
Depreciation expense | 45.5 | 41.5 | 134.9 | 122.1 | |||||
Proportional share of equity affiliates' depreciation | 1.3 | 1.3 | 3.9 | 3.9 | |||||
Income from equity investments | 2.8 | 3 | 4.2 | 8.6 | |||||
Interest expense, net | 39.9 | 28 | 108.6 | 74 | |||||
Income tax expense (benefit) | 7.5 | 3.1 | 19.6 | 9.2 | |||||
Adjusted EBITDA | 253.6 | 205 | 737.8 | 661.9 | |||||
Capital expenditures | [1] | 60.6 | 59.1 | 169.4 | 128.6 | ||||
Interest and Other | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Net income (loss) | (49.1) | (32.5) | (133.7) | (88.3) | |||||
Net income (loss) attributable to Hess Midstream LP | (14.9) | (5.8) | (38.7) | (15.8) | |||||
Interest expense, net | 39.9 | 28 | 108.6 | 74 | |||||
Income tax expense (benefit) | 7.5 | 3.1 | 19.6 | 9.2 | |||||
Adjusted EBITDA | (1.7) | (1.4) | (5.5) | (5.1) | |||||
Gathering Opco | Operating Segments | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues and other income | 182 | 157.3 | 511.8 | 464.6 | |||||
Net income (loss) | 103.4 | 91.7 | 296.8 | 276.5 | |||||
Net income (loss) attributable to Hess Midstream LP | 18.9 | 8.7 | 49.5 | 23.2 | |||||
Depreciation expense | 26.9 | 25.4 | 79.4 | 75.5 | |||||
Adjusted EBITDA | 130.3 | 117.1 | 376.2 | 352 | |||||
Capital expenditures | [1] | 55.8 | 45.4 | 159.2 | 103 | ||||
Processing and Storage | Operating Segments | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues and other income | 121.7 | 111.1 | 352 | 319.9 | |||||
Net income (loss) | 83.9 | 45 | 243.3 | 187.5 | |||||
Net income (loss) attributable to Hess Midstream LP | 15.2 | 4.5 | 40.6 | 15.6 | |||||
Depreciation expense | 14.5 | 12 | 43.3 | 34.4 | |||||
Proportional share of equity affiliates' depreciation | 1.3 | 1.3 | 3.9 | 3.9 | |||||
Income from equity investments | 2.8 | 3 | 4.2 | 8.6 | |||||
Adjusted EBITDA | 99.7 | 58.3 | 290.5 | 225.8 | |||||
Capital expenditures | [1] | 2.6 | 13.7 | 4.8 | 25.5 | ||||
Terminaling and Export | Operating Segments | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues and other income | 31.1 | 35.5 | 96.8 | 103 | |||||
Net income (loss) | 21.2 | 26.9 | 64.4 | 77 | |||||
Net income (loss) attributable to Hess Midstream LP | 4 | 2.5 | 10.7 | 6.5 | |||||
Depreciation expense | 4.1 | 4.1 | 12.2 | 12.2 | |||||
Adjusted EBITDA | 25.3 | $ 31 | 76.6 | 89.2 | |||||
Capital expenditures | [1] | $ 2.2 | $ 5.4 | $ 0.1 | |||||
[1] Includes acquisition, expansion and maintenance capital expenditures, as applicable. |
Segments - Total Assets for Rep
Segments - Total Assets for Reportable Segments (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Total assets | $ 3,601.5 | $ 3,485.6 | |
Interest and Other | |||
Segment Reporting Information [Line Items] | |||
Total assets | 198.7 | 127.7 | |
Gathering Opco | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,016.1 | 1,927 | |
Processing and Storage | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | [1] | 1,112.5 | 1,149.5 |
Terminaling and Export | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 274.2 | $ 281.4 | |
[1] Includes investment in equity investees of $ 98.3 million as of September 30, 2022 and $ 101.6 million as of December 31, 2021. |
Segments - Total Assets for R_2
Segments - Total Assets for Reportable Segments (Parenthetical) (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Processing and Storage | ||
Segment Reporting Information [Line Items] | ||
Cash contributed to acquire equity investments | $ 98.3 | $ 101.6 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | Oct. 24, 2022 $ / shares |
Subsequent Event [Line Items] | |
Distributions to unitholders decalred date | Oct. 24, 2022 |
Distribution payable date | Nov. 14, 2022 |
Distributions to unitholders recod date | Nov. 03, 2022 |
Subsequent Event | |
Subsequent Event [Line Items] | |
Distribution made to limited partner, approximate increase in percentage than prior year quarter declared | 1.20% |
Subsequent Event | Class A Shares | |
Subsequent Event [Line Items] | |
Quarterly cash distribution declared per share | $ 0.5627 |
Subsequent Event | Class B Shares | |
Subsequent Event [Line Items] | |
Quarterly cash distribution declared per share | $ 0.5627 |