The proposed Chevron transaction would add DJ Basin oil and gas gathering, storage and a Saddlehorn pipeline interest to Hess Midstream, while extending Bakken commercial agreements through 2045.
Published by Allstream Insiders
Allstream Insiders Summary
Hess Midstream LP has signed a definitive agreement with Chevron that is intended to establish Hess Midstream as an independent, multi-basin midstream company following closing. Under the proposed transaction, Hess Midstream would acquire Chevron’s crude-oil and natural-gas gathering and storage assets in the Denver-Julesburg, or DJ, Basin and amend its existing Bakken commercial agreements with Chevron.
Hess Midstream said it would pay Chevron $200 million in cash. Chevron would contribute all of its consolidated ownership interests in Hess Midstream and its general partner, which Hess Midstream says would be canceled or transferred as part of the transaction mechanics.
The companies expect the transaction to close by the end of 2026, subject to customary closing conditions. Until then, the DJ Basin assets remain a proposed acquisition, not assets owned or operated by Hess Midstream.
DJ Basin asset package at a glance
| Item | Company-reported detail |
|---|---|
| Primary location | Primarily Weld County, Colorado |
| Oil-gathering capacity | Approximately 400,000 barrels per day |
| Gas-gathering capacity | Approximately 300 MMcf/d |
| Storage capacity | Approximately 420,000 barrels |
| Saddlehorn interest | 20% interest in the approximately 600-mile, 300,000-barrel-per-day FERC-regulated crude-oil pipeline to Cushing, Oklahoma |
| Dedicated acreage | Approximately 670,000 acres, including Chevron agreements through 2045 |
| Closing expectation | By year-end 2026, subject to customary closing conditions |
What Hess Midstream would acquire in Colorado
The DJ Basin asset package includes crude-oil and natural-gas gathering and storage infrastructure located primarily in Weld County. Hess Midstream reported capacity of approximately 400,000 barrels per day of oil gathering, 300 MMcf/d of gas gathering and 420,000 barrels of storage.
The package also includes a 20% stake in Saddlehorn, a FERC-regulated crude-oil pipeline that Hess Midstream describes as approximately 600 miles long with capacity of 300,000 barrels per day. The line connects the DJ Basin to the Cushing storage hub in Oklahoma, according to the company.
Hess Midstream said the assets are supported by approximately 670,000 dedicated acres, including Chevron commercial agreements through 2045 and agreements with other investment-grade counterparties. The announcement does not identify new pipeline construction, plant expansions, storage additions, equipment orders or contractor awards associated with the acquisition.
How the Bakken agreements would change
In conjunction with the DJ Basin acquisition, Hess Midstream and Chevron would amend their existing Bakken crude-oil and natural-gas gathering and processing agreements. The companies said the amendments would reduce applicable tariffs and fees from 2027 through 2033 and extend the associated agreements from 2033 through 2045.
Hess Midstream said its cost-of-service-based Bakken agreements would convert to fixed-fee arrangements with inflation escalators. The amended agreements would also include an aggregate minimum revenue commitment set at 80% of expected Bakken revenue attributable to Chevron through 2033. That commercial structure is contingent on the proposed transaction closing and should not be read as a new physical construction program.
Chevron is expected to move from three to two drilling rigs in the Bakken in December 2026, according to Hess Midstream. The company characterized the broader commercial changes as supporting future Chevron investment in the basin; it did not announce a specific development budget, well program or midstream expansion project.
Governance, transition and capital plan remain subject to closing
At closing, Chevron would contribute its ownership interests in Hess Midstream’s general partner. Hess Midstream said Chevron-affiliated directors would depart the board, shareholders would gain the right to elect directors beginning in 2028, and the company would operate under a new name to be finalized before closing.
The companies also anticipate a two-year transition period under which Chevron would continue to provide certain administrative and operational services and second employees to Hess Midstream. Some Chevron employees are anticipated to transfer during that period.
Assuming a year-end closing, Hess Midstream provided preliminary 2027 guidance for approximately $125 million of capital expenditures across the DJ and Bakken basins. This is company guidance for the combined asset base, not a disclosed budget for a specific DJ Basin project or a contractor-ready scope of work.
Allstream perspective: asset diversification is defined; execution details are not
Allstream perspective: The announced agreement would give Hess Midstream a second operating basin and add defined gathering, storage and long-haul crude-pipeline exposure in the DJ Basin. The disclosed physical asset scope and long-term commercial agreements are meaningful, but the transaction has not closed.
For engineering, construction and equipment markets, the release does not identify projects that have entered execution. The next decision-useful disclosures would include transaction closing, any named integration program, capital-project approvals, asset modifications, procurement packages, contractor selections and project schedules. Until then, the announcement should be tracked as a proposed asset and governance transaction—not as confirmation of new construction work.
