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Hess Midstream's 2019 guidance projects strong volume growth, greater returns

Hess Midstream Partners LP expects to trim its spending in 2019 while significantly boosting key financial metrics.

The partnership said Dec. 13 that it expects 2019 net income to range from $415 million to $440 million, adjusted EBITDA to range from $550 million to $575 million and its distributable cash flow to be $103 million to $108 million. Hess Midstream said in late October that it expected 2018 net income of $370 million to $375 million, 2018 adjusted EBITDA of $495 million to $500 million and 2018 distributable cash flow of $96 million to $97 million.

Those financial improvements should come on the back of higher throughput of oil and gas on Hess Midstream systems. The partnership's 2019 guidance forecast gas gathering volumes to increase by 35,000 Mcf/d to 45,000 Mcf/d compared to the most recent 2018 guidance and expects oil gathering volumes to rise 20,000 to 25,000 barrels of oil per day.

In 2019, expansion capital net to Hess Midstream is expected to be trimmed to $53 million to $57 million, from a projected $68 million in 2018. Gross capital expenditures for 2019 are expected to be $275 million to $300 million, according to the release.

That spending will be focused on adding gas compression in the Bakken Shale, finishing the 200 MMcf/d LM4 gas processing plant new Watford City, N.D. and associated gathering lines, and preliminary work on the Tioga Gas plant expansion.

Hess Midstream Partners' assets are mainly in the Bakken and Three Forks shale plays in the Williston Basin of North Dakota.