With all the issues in transporting oil and gas from the North Dakota region, Hess Corp. thinks it may have helped solve some of the issues as they finalized a deal creating a joint venture to work on delivery mechanisms for oil and gas assets in that region.
Hess said it completed the sale of half of its midstream holdings in the Bakken reserve area of North Dakota to Global Infrastructure Partners for cash consideration of $2.68 billion.
“As planned, Hess and Global Infrastructure Partners have created a premier midstream joint venture — Hess Infrastructure Partners,” the corporation said.
New York- based Hess said in January it was cutting its overall capital and exploration budget for 2015 by 16 percent to $4.7 billion. Spending in Bakken, a shale area at the heart of the U.S. oil boom, will end up cut by 18 percent to $1.8 billion.
The company said it would use the proceeds to build a position of strength in the Bakken in the weak crude oil price environment and support future growth opportunities.
Hess last year said it would use revenue from a future initial public offering toward development of a natural gas processing plant and rail terminals in North Dakota.
Midstream operations in North Dakota will include pipeline and rail terminals for crude oil deliveries as well as a natural gas processing plant in Tioga.
North Dakota leaders are working to cut the amount of gas burned off, or flared, by oil deposits in the state. The state requires operators to capture at least 77 percent of the natural gas associated with oil deposits in the state rather than burn it off.