Hess Midstream's recent Q1 2024 earnings call was a symphony of bullish pronouncements. Volume growth, stable capital expenditures, and a generous shareholder return policy were all highlighted, painting a picture of a company thriving amidst the Bakken's surging energy landscape. Yet, nestled within this chorus of optimism, a subtle detail hints at a potentially more profound story - a whisper of Hess Midstream's ambition to become the undisputed midstream king of the Bakken.

The whisper comes in the form of the 2026 Minimum Volume Commitments (MVCs). While these figures, showcasing a projected 35% growth in gas volumes from 2023, garnered attention, the truly intriguing aspect lies in their impact on Hess Midstream's infrastructure planning. The company, expecting to reach full processing capacity by 2026, is already taking proactive steps to expand, with a planned addition of 125 million cubic feet per day in gas processing capacity slated to come online by mid-2027. This proactive approach, exceeding immediate demand, points towards a calculated strategy for capturing not only Hess Corporation's growth, but also a significant chunk of the Bakken's projected basin-wide expansion.

Here's where the whisper transforms into a potential roar. The North Dakota Pipeline Authority forecasts a substantial surge in Bakken gas production, reaching nearly 6 BCF per day by mid-2030. Hess Midstream, by proactively expanding its capacity, is positioning itself to capture a disproportionate share of this growth. Let's delve into the numbers:

Hess Midstream's 2026 MVCs imply a gas processing volume of 495 million cubic feet per day, effectively utilizing its entire 500 million cubic feet per day capacity. The additional 125 million cubic feet per day capacity planned for 2027 brings their total to 625 million cubic feet per day. Assuming a conservative 5% annual growth rate for Hess Midstream beyond 2026, their capacity by 2030 would be around 788 million cubic feet per day.

This 788 million cubic feet per day figure represents a staggering 13% of the North Dakota Pipeline Authority's projected 6 BCF per day basin-wide production by 2030. While Hess Corporation, their primary customer, will undoubtedly be a significant contributor, capturing such a substantial portion of the basin's growth necessitates attracting significant third-party volumes. This suggests that Hess Midstream is quietly setting the stage for a major expansion beyond its current role as primarily a captive midstream provider for Hess Corporation.

Factors Supporting Hess Midstream's Bakken Dominance Strategy

Challenges for Hess Midstream

Competition: Other established midstream players in the Bakken will be vying for the same third-party volumes. Egress Constraints: The basin's egress infrastructure, particularly for natural gas, may require further expansion to accommodate the projected production growth. Commodity Price Volatility: Fluctuations in oil and gas prices could impact producer activity and, consequently, midstream throughput volumes.

Projected Gas Processing Volume Growth

Despite these challenges, the subtle signal embedded within Hess Midstream's Q1 earnings call suggests a bold strategy for Bakken dominance. Their proactive infrastructure expansion, coupled with a favorable contract structure and a strong financial position, positions them to capture a substantial share of the basin's future growth. Whether this whisper ultimately becomes a triumphant roar remains to be seen, but one thing is clear - Hess Midstream is setting the stage for a potentially game-changing role in the Bakken's energy future.

"Fun Fact: Hess Midstream's Tioga Gas Plant, located in the heart of the Bakken, is one of the largest gas processing facilities in North Dakota, capable of processing over 250 million cubic feet of natural gas per day. Its impressive scale underscores the company's commitment to supporting the Bakken's growth."