Spectra Energy Corp. has agreed to drop down 50% of the Express-Platte Pipeline System to Spectra Energy Partners for $555 million in cash, $139 million in newly issued partnership units, and $129 million of acquired Express-Platte System debt.
“Spectra Energy’s drop-down of 50% of the Express-Platte System is in line with our expectation of dropping down more than $2 billion of fee-based assets over the next couple of years to create value for both SE and SEP investors,” said Greg Ebel, Spectra president and CEO.
The 1,717-mile Express-Platte System, which begins in Hardisty, Alberta, and terminates in Wood River, IL comprises the Express and Platte crude oil pipelines and is one of just three major pipeline systems moving crude oil from western Canada to Rockies and Midwest refineries and markets. The Express pipeline carries crude oil to U.S. refining markets in the Rockies area, specifically Billings and Laurel, MT and Casper, WY. The pipeline’s capacity is 280,000 bpd.
The Platte pipeline, which interconnects with the Express pipeline in Casper, WY, transports crude oil predominantly from the Bakken formation and western Canada to refiners in the Midwest. Platte’s capacity ranges from 164,000 bpd in Wyoming to 145,000 bpd in Illinois. The transaction is expected to close in the third quarter.