Spectra Energy (NYSE:SE) to Purchase Canada-to-Illinois Pipeline

Brian Hicks

Written By Brian Hicks

Posted December 12, 2012

Spectra Energy Corp. (NYSE: SE) is set to buy the Express-Platte pipeline system, running from Canada to Illinois, from Kinder Morgan Energy Partners LLP (NYSE: KMP) in a $1.25 billion cash deal. Spectra will also take on $240 million in debt.

From the Washington Post:

“This system is strategically located to supply crude oil to U.S. refining markets,” said Spectra CEO Greg Ebel. The Express-Platte moves crude from Western Canada to refineries in the Midwest and around the Rockies, and the company said that acquiring the network will help it benefit from the rapidly expanding North American oil market.

This is the latest in a series of major North American oil and gas deals as the production and delivery infrastructure shifts around to adjust for booming oil and gas production.

The Energy Department stated that monthly crude production back in September hit its highest levels since 1998. The International Energy Association claimed that the U.S. may even surpass Saudi Arabia in crude oil production by 2020, the Washington Post reports.

The Express pipeline can carry some 280,000 barrels/day, and the Platte can handle between 145,000 and 164,000 bpd.

Spectra said the deal should see company shares increase by 3-5 cents per share. All arrangements should conclude by early 2013.

Spectra shares were down 0.4% today. The company has lost more than 11 percent in 2012 to date.

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