Successful Start-up for SE Projects

Spectra Energy Corporation’s (SE - Analyst Report) two important expansion projects –– Northeastern Tennessee (NET) and TEMAX/TIME III–– have come online as scheduled and well within the budget.

The NET project became operational on September 1. It is owned by Spectra Energy Partners (SEP - Snapshot Report), the master limited partnership of Spectra Energy. It is an extension of the East Tennessee Natural Gas system which serves as the transportation for up to 150 million cubic feet per day (Mmcf/d) to the Tennessee Valley Authority's latest 880-megawatt combined cycle, natural gas-fired power plant in the northeast of the state.

TEMAX/TIME III Project also came online on the same date. This project will benefit shippers like ConocoPhillips (COP - Analyst Report), CenterPoint Energy Services and PPL EnergyPlus which receive natural gas supplies from Spectra Energy’s Texas Eastern Transmission system and for markets in the northeast United States. The project has enhanced the company's Texas Eastern Transmission system’s capacity to transport up to 455 Mmcf/d of Rocky Mountain natural gas supplies.

These projects form a part of Spectra Energy’s ongoing $1 billion to $1.5 billion per year capital expansion plan. With the completion of these two projects, Spectra Energy has put six projects into service in 2011. The other projects that became operational earlier this year are Bissette Pipeline, Gulfstream Phase V, Moss Bluff Cavern 4 and Hot Spring Lateral.

Bissette Pipeline increased the production capacity from the Montney shale basin to the South Peace Pipeline by 200 Mmcf/d. The Gulfstream Phase V installation of 20,500 horsepower (HP) of compression added 35,000 cubic feet of firm capacity into Florida. Moss Bluff Cavern 4, a 6.5 billion cubic feet (Bcf) expansion of the salt dome storage facility in Liberty County, Texas, increased the total working gas capacity to 21.5 Bcf. Hot Spring Lateral Project expanded the company's Texas Eastern system, supplying up to 120 Mmcf/d of capacity to KGen's Hot Spring power plant in Hot Spring County, Ark.

Spectra Energy holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. For the long term, we maintain an Outperform rating on the stock as the fundamentals of the company remain strong with a large number of new projects adding to its revenue and  the company’s continued efforts to augment regional access to diverse supplies.

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