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Hess Midstream reported lower third-quarter capital spending after completing a gas-compression expansion in January, while reiterating its $105 million 2026 capital plan and its expected year-end close of the previously announced Chevron DJ Basin transaction.
Published by Allstream Insiders
Allstream Insiders Summary
Hess Midstream LP said its third-quarter 2026 capital expenditures totaled $21.5 million, down from $79.8 million in the prior-year quarter. According to the company’s October 30 announcement, the decline primarily reflects the completion of its gas-compression-capacity expansion in January 2026.
The company reiterated $105 million of expected capital expenditures for full-year 2026. The quarterly release did not announce a new named pipeline, processing plant, contractor award or construction schedule.
Hess Midstream also said it still expects its previously announced transaction with Chevron to close by the end of 2026, subject to customary closing conditions. Under the October 6 agreement, Hess Midstream would pay Chevron $200 million in cash and receive Chevron’s DJ Basin crude-oil and natural-gas gathering and storage assets, along with Chevron’s ownership interests in Hess Midstream and its general partner.
Capital and transaction update at a glance
| Item | Company-reported detail |
|---|---|
| Third-quarter 2026 capital expenditures | $21.5 million |
| Full-year 2026 capital-expenditure guidance | $105 million |
| Completed 2026 project cited | Gas-compression-capacity expansion completed in January |
| Proposed cash consideration to Chevron | $200 million |
| Transaction status | Expected to close by year-end 2026, subject to customary conditions |
| Preliminary 2027 capital-expenditure guidance | Approximately $125 million, assuming closing |
| 2027 capital-program geography | Bakken and DJ basins |
| New project-level awards in the Q3 release | Not disclosed |
What the third-quarter update says about current capital activity
Hess Midstream’s third-quarter capital spending was substantially lower than the comparable 2025 period because the company had completed its gas-compression expansion earlier this year. The company did not identify the expansion’s location, capacity addition, total project cost, equipment suppliers, engineering firm or construction contractors in the October 30 release.
The reiterated $105 million 2026 capital plan is a company-wide annual figure. It should not be treated as the budget for one named facility, pipeline segment or compression project.
The company also reported lower year-over-year oil terminaling, gas-processing and water-gathering volumes, primarily because of lower production. Those operating results do not change the status of the proposed DJ Basin transaction, which remains subject to closing conditions.
Previously announced DJ Basin transaction remains the central growth item
The October 6 agreement with Chevron is Hess Midstream’s principal previously announced strategic development. If completed, the transaction would expand the company beyond the Bakken into the DJ Basin and establish it as an independent, multi-basin midstream company.
Hess Midstream said it would pay Chevron $200 million in cash. In return, Chevron would transfer DJ Basin crude-oil and natural-gas gathering and storage assets, as well as Chevron’s ownership interests in Hess Midstream and the company’s general partner.
Hess Midstream said the DJ Basin assets include approximately:
- 400,000 barrels per day of oil-gathering capacity;
- 300 MMcf/d of gas-gathering capacity;
- 420,000 barrels of storage capacity;
- a 20% interest in the approximately 600-mile Saddlehorn crude-oil pipeline; and
- approximately 670,000 dedicated acres supported by Chevron and other counterparties.
The companies also plan to amend their Bakken commercial agreements. Hess Midstream said the revised agreements would reduce certain tariffs payable by Chevron for 2027 through 2033 while extending the commercial relationship through 2045.
A $125 million preliminary 2027 capital plan is contingent on closing
Assuming the transaction closes by year-end, Hess Midstream has provided preliminary 2027 capital-expenditure guidance of approximately $125 million across the Bakken and DJ basins.
That figure is a portfolio-level forecast rather than a list of sanctioned projects. Hess Midstream has not allocated the expected spending among gathering lines, compression, processing, storage, pipeline integrity, automation, electrical systems or other facilities. It also has not announced project-specific schedules, permits, equipment orders, engineering packages or construction awards tied to the 2027 estimate.
Allstream perspective: an operating update with a pending multi-basin expansion behind it
Allstream perspective: The third-quarter release is primarily an operating and capital-guidance update. The most significant forward-looking element remains the pending Chevron transaction, which would add a material DJ Basin asset base and establish a preliminary $125 million capital program for 2027 if the deal closes.
A project portfolio of this type could create future demand for engineering and design, gathering-line work, compression and processing support, storage and terminal services, pumps, valves, automation and electrical equipment, integrity work, welding, civil construction, inspection, coatings, insulation, scaffolding and equipment rentals. However, Hess Midstream has not assigned those scopes to individual projects or identified suppliers and contractors.
The next decision-useful milestones will be transaction closing, updated 2027 operating guidance, asset-specific capital plans, permit activity and any announced engineering, equipment or construction awards.
