HOUSTON, Sept. 8, 2015 /PRNewswire/ -- Phillips 66
(NYSE: PSX) and Spectra Energy (NYSE: SE), 50/50 joint venture
owners in DCP Midstream, LLC, have entered into a nonbinding letter
of intent for contributing assets to strengthen DCP Midstream.
This transaction is expected to provide DCP Midstream with a
stronger balance sheet and increased financial flexibility, and
positions DCP to grow through commodity price cycles.
Spectra Energy has agreed to contribute its ownership interest
in both the Sand Hills and Southern Hills NGL pipelines. Phillips
66 has agreed to contribute $1.5
billion in cash, which is expected to be used to pay down a
portion of the DCP Midstream revolving credit facility. The
transaction, anticipated to close in the fourth quarter of this
year, is subject to the parties entering into a definitive
agreement and customary consents, including approval by Spectra
Energy Partners' board of directors and regulatory approvals.
The proposed transaction complements efforts at DCP Midstream to
reduce operating costs, sell certain non-core assets, and convert
certain contracts from commodity price sensitive to fee-based.
"DCP Midstream is a valuable portion of our NGL value chain and
part of our plans to grow," said Greg
Garland, chairman and CEO of Phillips 66. "This infusion of
cash and operating assets by the joint venture owners will enhance
the credit profile of DCP Midstream, provide stability to the
existing business and allow pursuit of growth opportunities."
"The contribution of the one-third interests in Sand Hills and
Southern Hills will diversify DCP Midstream by enhancing the
balance of fee-based assets while building on the re-contracting
work already underway," said Greg
Ebel, chairman and CEO of Spectra Energy. "In addition, the
infusion of cash to pay down debt will result in DCP Midstream bank
credit metrics that will be much stronger, allowing DCP to continue
providing excellent service to customers and retain its number one
position in gas processing and NGL production. This deal also
retains the upside for owners as commodities improve."
Following this transaction, Phillips 66 and Spectra Energy will
remain 50/50 joint venture owners of DCP Midstream. Headquartered
in Denver, DCP Midstream, LLC has
strategically located assets in liquids-rich developments and is
the largest natural gas processor and the largest natural gas
liquids producer in the U.S. In addition, DCP Midstream, LLC has a
midstream master limited partnership, DCP Midstream Partners, LP
(NYSE: DPM). The partnership is engaged in all stages of the
midstream business.
CAUTIONARY STATEMENTS
This press release contains forward-looking statements as
defined under the federal securities laws. Although the companies
believe that expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to be correct. In addition, these
statements are subject to certain risks, uncertainties and other
assumptions that are difficult to predict and may be beyond the
companies' control. If one or more of these risks or uncertainties
materialize, or if underlying assumptions prove incorrect, actual
results may vary materially from what the companies anticipated,
estimated, projected or expected. Factors that may have a direct
bearing on the forward-looking statements include, without
limitation, completion or timing of the anticipated
contributions. Other factors that may have direct bearing on
the forward-looking statements are described in the filings that
each company makes with the Securities and Exchange Commission. In
light of these risks, uncertainties and assumptions, the events
described in the forward-looking statements might not occur or
might occur to a different extent or at a different time than as
described. All forward-looking statements in this release are made
as of the date hereof and the companies undertake no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
About Phillips 66
Phillips 66 is a diversified energy manufacturing and logistics
company. With a portfolio of Midstream, Chemicals, Refining, and
Marketing and Specialties businesses, the company processes,
transports, stores and markets fuels and products globally.
Phillips 66 Partners, the company's master limited partnership, is
an integral asset in the portfolio. Headquartered in Houston,
the company has 14,000 employees committed to safety and operating
excellence. Phillips 66 had $50 billion of assets as
of June 30, 2015. For more information,
visit www.phillips66.com or follow us on Twitter
@Phillips66Co.
About Spectra Energy
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of
North America's leading pipeline
and midstream companies. Based in Houston, Texas, the company's operations in
the United States and Canada include more than 22,000 miles of
natural gas, natural gas liquids, and crude oil pipelines;
approximately 300 billion cubic feet (Bcf) of natural gas storage;
4.8 million barrels of crude oil storage; as well as natural gas
gathering, processing, and local distribution operations. Spectra
Energy is the general partner of Spectra Energy Partners (NYSE:
SEP), one of the largest pipeline master limited partnerships in
the United States and owner of the
natural gas, natural gas liquids, and crude oil assets in Spectra
Energy's U.S. portfolio. Spectra Energy also has a 50 percent
ownership in DCP Midstream, the largest producer of natural gas
liquids and the largest natural gas processor in the United States. Spectra Energy has served
North American customers and communities for more than a century.
For more information, visit www.spectraenergy.com and
www.spectraenergypartners.com.
About DCP Midstream, LLC
DCP Midstream, LLC leads the midstream segment as the largest
natural gas processor, the largest natural gas liquids producer and
one of the largest marketers in the U.S. DCP Midstream operates in
17 states across major producing regions. The company is a 50-50
joint venture between Phillips 66 and Spectra Energy. It owns the
general partner of DCP Midstream Partners, LP (NYSE: DPM), a master
limited partnership, and provides operational and administrative
support to the partnership. DCP Midstream is the largest oil and
gas company and the largest private company in Denver, the city of its headquarters. For more
information, visit the DCP Midstream website at
www.dcpmidstream.com.
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SOURCE Spectra Energy Corp