Hess Midstream LP has executed a definitive agreement that provides for the repurchase of approximately $100 million of Class B units by its subsidiary, Hess Midstream Operations LP.

The units will be purchased from affiliates of Hess Corp. and Global Infrastructure Partners, a part of BlackRock, which Hess Midstream termed as its sponsors.

Pursuant to the terms of the buyback agreement, repurchased units will be cancelled upon the closing of the unit repurchase transaction, which is expected to result in increased distributable cash flow per Class A share. Hess Midstream said the repurchase will provide for incremental distribution growth above the company’s annual distribution target of at least 5% through 2026.

“We continue to execute unit repurchase transactions as part of our unique financial strategy, which highlights our differentiated ability to deliver significant shareholder returns while also maintaining balance sheet strength,” said Jonathan Stein, CFO of Hess Midstream. “Since the beginning of 2021 through this current transaction, we will have returned $1.95 billion to shareholders through ongoing unit repurchases from our Sponsors. Following this unit repurchase, which is expected to provide immediate accretion to our shareholders, we expect to continue to have more than $1.25 billion of financial flexibility through 2026 that can be used to support potential incremental unit repurchases.”

The terms of the proposed unit repurchase transaction were unanimously approved by the board of Hess Midstream’s general partner, based on the unanimous approval and recommendation of its conflicts committee composed solely of independent directors.

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