Spectra Energy Corp and Spectra Energy Partners close on 50 percent of the Express-Platte Pipeline System drop-down

Spectra Energy Corp (NY SE: SE) announced final closing on the drop-down of 50 percent of the Express-Platte crude oil pipeline system (Express-Platte System) to its master limited partnership (MLP), Spectra Energy Partners, LP (NYSE: SEP), for approximately $410 million in cash, $319 million in newly issued partnership units, and $129 million of acquired Express-Platte System debt, which includes the effect of customary closing purchase price adjustments.

"This initial phase of the Express-Platte System drop-down sets the stage for our larger plan to drop our remaining U.S. Transportation and Storage assets to our MLP," said Greg Ebel, president and chief executive officer, Spectra Energy Corp. "These asset drop-downs build a more robust MLP, creating value for both Spectra Energy and Spectra Energy Partners investors. The use of our MLP to efficiently fund growth is a key part of our strategy to execute on more than $25 billion in growth opportunities by the end of the decade."

"This transaction expands Spectra Energy Partners' growth platform to include the rapidly growing North American crude oil transportation and storage market and diversifies the partnership's profile of steady, fee-based cash flows with an attractive escalating-fee asset," said Julie Dill, president and chief executive officer, Spectra Energy Partners.

The 1,717-mile Express-Platte System, which begins in Hardisty, Alberta, and terminates in Wood River, Illinois, comprises the Express and Platte crude oil pipelines and is one of just three major pipeline systems moving crude oil from western Canada to Rockies and Midwest refineries and markets. The Express pipeline carries crude oil to U.S. refining markets in the Rockies area, specifically Billings and Laurel, Montana, and Casper, Wyoming. The pipeline's capacity is 280,000 barrels a day. The Platte pipeline, which interconnects with the Express pipeline in Casper, Wyoming, transports crude oil predominantly from the Bakken formation and western Canada to refiners in the Midwest. Platte's capacity ranges from 164,000 barrels a day in Wyoming to 145,000 barrels a day in Illinois.

On July 24, in anticipation of this closing, the Board of Directors of SEP's General Partner declared a quarterly distribution increase of three-quarters cent bringing its total annual distribution to $2.035.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More

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Source: http://feeds.oilvoice.com/~r/NorthAmericaHeadlines/~3/0iAahsVKy78/6db7bf542389.aspx

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