By Nathalie Tadena 
 

Spectra Energy Corp. (SE) said it plans to drop down its remaining U.S. transmission and storage assets to Spectra Energy Partners (SEP) by the end of the year, a move that will allow both companies to increase their dividends.

Spectra Energy, which operates natural-gas pipelines and storage facilities in North America, said it expects to provide its investors with dividend growth of about 12 cents a year versus its current commitment of eight cents a year by completing the asset drop-down. The move will also allow Spectra Energy Partners to increase its quarterly distribution rate to a penny versus its current payout of three-quarters of a cent.

Like its peers, Spectra Energy has faced strong headwinds from low commodity prices, which weighed on its bottom line in recent quarters. Last month, the company reported its first-quarter earnings rose 2.1%, boosted by stronger distribution revenue though transmission revenue was down.

Spectra Energy shares were up 2.1% to $30.95 after hours Tuesday. The stock is up 11% since the start of the year.

Write to Nathalie Tadena at nathalie.tadena@dowjones.com

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