Spectra Energy Announces Agreements On Sand Hills, Southern Hills NGL Interests

(RTTNews) - Spectra Energy Corp (SE) and Spectra Energy Partners, LP (SEP) announced they have executed an agreement for the acquisition by Spectra Energy of Spectra Energy Partners' one-third ownership interests in the Sand Hills and Southern Hills natural gas liquids (NGL) pipelines. Spectra Energy has also executed an agreement with Phillips 66 (PSX) and DCP Midstream, LLC, under which Spectra Energy will contribute its interests in the Sand Hills and Southern Hills pipelines and Phillips 66 will contribute $1.5 billion in cash, respectively, to DCP Midstream.

DCP Midstream, LLC is the 50-50 joint venture between Spectra Energy and Phillips 66.

In consideration for Spectra Energy Partners' interests in Sand Hills and Southern Hills, Spectra Energy will transfer for redemption and cancellation 21,560,000 limited partner units, 440,000 general partner units, and a reduction in the distribution right payments associated with the cancelled units. Spectra Energy will grant a three-year, $4 million per calendar quarter giveback of distributions on its incentive distribution rights, beginning with distributions payable in the first quarter 2016.