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Hess Midstream-Targa Resources to Build Gas Processing Plant

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Hess Corporation’s (HES - Free Report) master limited partnership (MLP), Hess Midstream Partners LP ("HESM"), has formed a joint venture ("JV") with Targa Resources Corp. (TRGP - Free Report) to construct a $150-million natural gas processing plant — Little Missouri Four (LM4).

The LM4 will be constructed at Targa Resources’ existing Little Missouri facility, south of the Missouri River in McKenzie County, ND. The plant is expected to have a processing capacity of 200 million standard cubic feet per day and is scheduled to be complete in fourth-quarter 2018.

Targa Resources will be the operator of the plant with a holding of 50% and supervise the construction. The remaining 50% will be held by Hess Midstream.

Hess Midstream will finance part of the plant’s construction and also provide funds for the new pipeline infrastructure to be used to gather volumes to the plant. Hess Midstream’s gas processing capacity in the Bakken will increase to 350 million standard cubic feet per day following the LM4-related investments.

The companies’ considerable acres in the Bakken will majorly support this joint venture. This emphasizes the companies’ continuous focus to take advantage of the opportunities that are competent and expected to build on volumes, eventually.

Hess Midstrream formed its MLP in January 2014 to own, operate, develop and acquire a diverse set of midstream assets. It was created with an aim to offer services to the company and third-party crude oil and natural gas producers. The company’s assets are located in the Bakken and Three Forks Shale plays in the Williston Basin area of North Dakota.

Price Performance

The company’s shares have gained 22.9% in the last three months compared with the industry’s rally of 19.5%.


Zacks Rank & Key Picks

Hess has a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector include Pioneer Natural Resources Company (PXD - Free Report) and Royal Dutch Shell plc (RDS.A - Free Report) . Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered at Irving, TX, Pioneer Natural Resources Company is an independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 67.62% over the preceding four quarters.

Netherlands-based Royal Dutch Shell is an integrated oil and gas company. The company delivered a positive earnings surprise of 18.07 % in the preceding quarter.

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