Spectra Energy Corp (NY SE: SE) announced it has closed its previously announced acquisition of the Express-Platte Pipeline System, purchasing 100 percent interest in the 1,717-mile, crude oil system for $1.49 billion.
"The Express-Platte Pipeline System will bring immediate benefit to Spectra Energy's shareholders, expanding our portfolio with crude oil transportation and storage assets producing earnings on day one," said Greg Ebel , president and chief executive officer, Spectra Energy Corp. "This strategically located system gives Spectra Energy instant scale and scope in this rapidly growing space. As we've seen in our natural gas and natural gas liquids businesses, we anticipate these assets also will provide numerous growth opportunities in related crude and refined products services as volumes and flows evolve in the coming years. And finally, the escalating fee-based cash flow profile of Express-Platte makes it an ideal future drop-down candidate to our master limited partnership, Spectra Energy Partners."
Duane Rae , president, Spectra Energy Liquids, assumes leadership of the Express-Platte System as part of his overall responsibility for developing Spectra Energy's crude oil infrastructure business. Mr. Rae most recently served as vice president of field services for Spectra Energy Transmission's operations in Western Canada and previously held the role of president for Spectra Energy Midstream.
The Express-Platte Pipeline System, which begins in Hardisty, Alberta, and terminates in Wood River, Illinois, includes the Express and Platte crude oil pipelines. The Express pipeline carries crude oil to refining markets in the Rocky Mountain states. 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 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.
The Express-Platte System is one of just three major pipelines moving crude oil from Western Canada to the U.S. The system also serves the Bakken and Niobrara shale oil plays. The acquisition represents a significant opportunity for Spectra Energy to participate in the rapidly expanding North American crude oil transportation and storage market.
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