Back to top

Image: Bigstock

Spectra Unit Awarded Pipeline Construction Contract by CFE

Read MoreHide Full Article

Spectra Energy Corp’s (SE - Free Report) affiliate, Valley Crossing Pipeline, LLC, has been given a contract to construct a 168-mile intrastate natural gas pipeline project by Mexico’s state-owned utility, the Comisión Federal de Electricidad (“CFE”). The project is valued at $1.5 billion.

CFE has a customer base of 37 million. The main objective of the project is to provide natural gas transportation services to meet Mexico’s rising electric generation needs. The services are scheduled to start from 2018.

The construction work by Valley Crossing will include a header system of over 5 billion cubic feet per day (Bcf/d) near the Agua Dulce Hub in Nueces County, TX. The Spectra unit will also be responsible for building a 2.6 Bcf/d pipeline extending from the header to Brownsville, TX. These will be operated by Valley Crossing as well. The pipeline will be further extended from Brownsville to Sur de Texas where it will be linked to the Tuxpan pipeline. Thereafter, the pipeline will extend into Mexico.

The latest contract further strengthens Spectra Energy’s already strong asset portfolio. The deal also takes it closer to its goal of obtaining $35 billion in capital expansion projects by the end of this decade. Notably, some of these projects, valued at about $20 billion, are either in implementation stage or have been commissioned since 2013.

The contract for this vital infrastructure gives Spectra Energy the opportunity to support Mexico as its electric generators move away from oil and imported LNG.
 

Spectra Energy, through its subsidiaries and equity affiliates, engages in the ownership and operation of a portfolio of complementary natural gas-related energy assets. The company operates in four segments – U.S. Transmission, Distribution, Western Canada Transmission & Processing, and Field Services.

Currently, Spectra Energy carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include CVR Refining, LP , PetroChina Co. Ltd. and Braskem S.A. (BAK - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Sea Limited Sponsored ADR (SE) - free report >>

Braskem S.A. (BAK) - free report >>

Published in