Texas-based Spectra Energy Corporation (SE) and Spectra Energy Partners, L.P have inked an agreement with Eastman Chemical Company for a period of 25 years relating to their East Tennessee Natural Gas (ETNG) pipeline.
Per the agreement, the pipeline will supply an incremental 86 million cubic feet per day (MMcf/d) of fixed transportation capacity to Eastman’s Kingsport facility, Tennessee. The transfer of the capacity is planned under two phases.
The total capital costs of the projects are expected to be $120 million. The cost comprises making alterations to the existing ETNG facilities and construction of a new 6.4 mile pipeline extension.
On completion of the projects, ETNG is supposed to supply a fixed capacity of 121 MMcf/d to the Kingsport facility, in addition to the Eastman's current contracts. The first project, which includes supplying 25 MMcf/d of the capacity is anticipated to be commissioned by November 2013.
The Kingsport Expansion Project, which is expected to commence operations in the first quarter of 2015, will provide 61 MMcf/d of additional capacity. The projects are subject to regulatory approvals and consent from the boards of directors of Spectra Energy Corp., Spectra Energy Partners and Eastman Chemical Company.
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. Moreover, the company has 50% ownership in DCP Midstream – one of the largest natural gas gatherers and processors in the U.S.
Spectra Energy, which inked an agreement last month to purchase the Express-Platte Pipeline System from Kinder Morgan Energy Partners L.P. (KMP), holds a Zacks Rank #3 (Short term Hold rating). For the long term, we maintain our Neutral recommendation.
KINDER MORG ENG (KMP): Free Stock Analysis Report
SPECTRA ENERGY (SE): Free Stock Analysis Report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment