A new model formulation and solution strategy for the design and simulation of processes involving multistream heat exchangers (MHEXs) is presented. The approach combines an extension of pinch analysis with an explicit dependence on the heat exchange area in a nonsmooth equation system to create a model which solves for up to three unknown variables in an MHEX. Recent advances in automatic generation of derivative-like information for nonsmooth equations make the method tractable, and the use of nonsmooth equation solving methods make the method very precise. Several illustrative examples and a case study featuring an offshore liquefied natural gas production concept are presented which highlight the flexibility and strengths of the formulation.