Hess Midstream Partners LP (NYSE:HESM) (Hess Midstream) announced today plans to expand natural gas processing capacity at the Tioga Gas Plant (Tioga) by 150 million cubic feet per day (MMcf/d) creating a total of 400 MMcf/d processing capacity north of the Missouri river. The 150 MMcf/d Tioga expansion is expected to add residue and y-grade liquids processing capacity to the existing full fractionation and ethane extraction capability of the current plant, and product takeaway has been secured. The expansion is expected to be in service in mid-2021 and cost approximately $150 million gross, or $30 million net to Hess Midstream.
Continued Bakken growth from Hess and third parties has created additional demand for processing capacity north of the Missouri river, said John Gatling, Chief Operating Officer of Hess Midstream. We are efficiently expanding our service offering across our gathering, processing and terminaling systems. Following the completion of the Little Missouri 4 Gas Processing Plant and the Tioga expansion, Hess Midstream will have 500 MMcf/d of net processing capacity in the Bakken.
Consistent with our commitment to deliver stable and growing cash flows, the expansion will earn a competitive return through inclusion in our existing contract structure, providing continued visibility to our growth, said Jonathan Stein, Chief Financial Officer of Hess Midstream. We continue to primarily self-fund both our growing distributions and our expansion program, including this incremental investment, and have clear visibility to deliver our targeted 15% annual distribution growth per unit with at least a 1.1x coverage ratio.
About Hess Midstream
Hess Midstream Partners LP is a fee-based, growth-oriented, traditional master limited partnership that was formed to own, operate, develop and acquire a diverse set of midstream assets to provide services to Hess and third-party customers. Hess Midstreams assets are primarily located in the Bakken and Three Forks Shale plays in the Williston Basin area of North Dakota. More information is available at www.hessmidstream.com.
Forward Looking Statements
This press release may include forward-looking statements within the meaning of the federal securities laws. Generally, the words anticipate, estimate, expect, forecast, guidance, could, may, should, believe, intend, project, plan, predict, will and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and current projections or expectations. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in Hess Midstreams Annual Report on Form 10-K for the year ended December 31, 2018 and other SEC filings. Hess Midstream undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.