Reports related to this article:
Project(s): View 19 related projects in PECWeb
Plant(s): View 15 related plants in PECWeb
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Leading midstream company Spectra Energy Corporation (NYSE:SE) (Houston, Texas) pressed on with a slew of major expansion projects in third-quarter 2015, despite natural gas, natural gas liquids (NGL) and crude-oil prices being half of what they were in third-quarter 2014. A weak Canadian dollar also took a bite out of earnings, particularly in the Distribution and Western Canadian segments. Industrial Info is tracking $12.79 billion in projects involving Spectra.
Among the projects tracked by Industrial Info is the 250-mile NEXUS Pipeline project, which is slated to bring natural gas to Michigan and Ontario from the Utica Shale by the end of 2017. DTE Energy Company (NYSE:DTE) (Detroit, Michigan) also is developing the project. Industrial Info is tracking $775 million in active projects involving the NEXUS pipeline. For more information on the project, see October 26, 2015, article - DTE Energy Ups Role in Utica Shale Pipeline as Profits Rise in Third-Quarter 2015, Expects 15% Full-Year Capex Growth, and September 28, 2015, article - New Pipelines to Bring Gas to the West and Southwest, Creating New Competitive Dynamics .
Spectra filed applications with the U.S. Federal Energy Regulatory Commission (FERC) for several major projects in the past two months, including the Atlantic Bridge Pipeline Project, a proposed expansion of the Algonquin Gas Transmission and Maritimes & Northeast pipeline systems, which is designed to supply natural gas throughout the New England states; the Access South Pipeline Project, which is designed to supply natural gas from the Appalachian region to markets in the U.S. Southeast; and the Adair Southwest Pipeline Project, which is designed to supply natural gas from the Appalachian region to markets in the U.S. Midwest. Industrial Info is tracking $156 million in projects involving Atlantic Bridge; $370 million in projects involving Access South; and $20 million in project involving Adair Southwest.
Total capital and investment expenditures for the first nine months of 2015 were reported to be $1.91 billion, compared with $1.66 billion in the same period in 2014. Of this year's total, about $1.41 billion was attributed to growth capital expenditures and about $500 million to maintenance.
Net income at Spectra was reported to be $174 million for the quarter, a 13.43% decrease from third-quarter 2014, while total operating revenues stood at $1.1 billion, an 8.62% decrease. Spectra executives stressed that earnings stand at $660 million, a 4.62% decrease, when using the "EBITDA" method, which excludes interest expense, income taxes, depreciation, amortization, and foreign currency losses.
The company's Field Services segment was the most negatively affected by market conditions, with lower commodity prices and weaker gains on unit issuances from DCP Midstream Partners LP, a master limited partnership that is owned by DCP Midstream (NYSE:DPM) (Houston, Texas), a 50:50 joint venture between Spectra Energy and Phillips 66 (NYSE:PSX) (Bartlesville, Oklahoma). Natural gas liquids (NGL) prices averaged $0.42 per gallon, during the quarter, compared with $0.90 in the same period last year; NYMEX natural gas averaged $2.77 per million British thermal units (MMBtu), compared with $4.06 per MMBtu; and crude oil averaged about $46 per barrel, compared with $97 per barrel in third-quarter 2014.
More positive results were seen at Spectra's largest segment, Spectra Energy Partners, which fully or partly placed into service several NGL expansion projects: the TEAM 2014 and TEAM South projects in 2014, and the Uniontown-to-Gas City and OPEN projects this year. The segment also benefited from higher tariff rates and volumes on its Express Pipeline, which runs from Alberta to Wyoming. However, Spectra Energy Corporation's Distribution and Western Canada Transmission & Processing segments both reported weaker earnings on a lower Canadian dollar, with the latter also seeing lower earnings at its NGL plant in Empress, Alberta.
"Our base business continues to perform well, and I'm pleased to report that we have achieved a renewal rate of about 98% of our contracted revenue on the U.S. natural gas pipelines, which is an indication of the value of our underlying base business," said John Patrick Reddy, the chief financial officer of Spectra, in a conference call.
Spectra has about $700 million in capital-expenditure plans for expansions for the remainder of 2015. The first phase of the company's Dawn-to-Parkway Transmission Line, which is expected to transport up to 442 million standard cubic feet per day of natural gas from Detroit, Michigan, to Parkway, Ontario, is expected to begin service by year's end. Next year's phase, which is being tracked by Industrial Info, is under construction and is expected to be completed toward the end of 2016.
"When this backlog of projects is in service, along with the others we'll place into service this year, investors can expect these projects to generate about $1 billion of EBITDA by 2020," said Gregory Ebel, the chairman, president and chief executive officer of Spectra, in a conference call. "In addition to our backlog of projects in execution, we've got a robust portfolio of opportunities in development that will lead to continued growth in 2018 and beyond, and we're working diligently towards advancing those projects."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Among the projects tracked by Industrial Info is the 250-mile NEXUS Pipeline project, which is slated to bring natural gas to Michigan and Ontario from the Utica Shale by the end of 2017. DTE Energy Company (NYSE:DTE) (Detroit, Michigan) also is developing the project. Industrial Info is tracking $775 million in active projects involving the NEXUS pipeline. For more information on the project, see October 26, 2015, article - DTE Energy Ups Role in Utica Shale Pipeline as Profits Rise in Third-Quarter 2015, Expects 15% Full-Year Capex Growth, and September 28, 2015, article - New Pipelines to Bring Gas to the West and Southwest, Creating New Competitive Dynamics .
Spectra filed applications with the U.S. Federal Energy Regulatory Commission (FERC) for several major projects in the past two months, including the Atlantic Bridge Pipeline Project, a proposed expansion of the Algonquin Gas Transmission and Maritimes & Northeast pipeline systems, which is designed to supply natural gas throughout the New England states; the Access South Pipeline Project, which is designed to supply natural gas from the Appalachian region to markets in the U.S. Southeast; and the Adair Southwest Pipeline Project, which is designed to supply natural gas from the Appalachian region to markets in the U.S. Midwest. Industrial Info is tracking $156 million in projects involving Atlantic Bridge; $370 million in projects involving Access South; and $20 million in project involving Adair Southwest.
Total capital and investment expenditures for the first nine months of 2015 were reported to be $1.91 billion, compared with $1.66 billion in the same period in 2014. Of this year's total, about $1.41 billion was attributed to growth capital expenditures and about $500 million to maintenance.
Net income at Spectra was reported to be $174 million for the quarter, a 13.43% decrease from third-quarter 2014, while total operating revenues stood at $1.1 billion, an 8.62% decrease. Spectra executives stressed that earnings stand at $660 million, a 4.62% decrease, when using the "EBITDA" method, which excludes interest expense, income taxes, depreciation, amortization, and foreign currency losses.
The company's Field Services segment was the most negatively affected by market conditions, with lower commodity prices and weaker gains on unit issuances from DCP Midstream Partners LP, a master limited partnership that is owned by DCP Midstream (NYSE:DPM) (Houston, Texas), a 50:50 joint venture between Spectra Energy and Phillips 66 (NYSE:PSX) (Bartlesville, Oklahoma). Natural gas liquids (NGL) prices averaged $0.42 per gallon, during the quarter, compared with $0.90 in the same period last year; NYMEX natural gas averaged $2.77 per million British thermal units (MMBtu), compared with $4.06 per MMBtu; and crude oil averaged about $46 per barrel, compared with $97 per barrel in third-quarter 2014.
More positive results were seen at Spectra's largest segment, Spectra Energy Partners, which fully or partly placed into service several NGL expansion projects: the TEAM 2014 and TEAM South projects in 2014, and the Uniontown-to-Gas City and OPEN projects this year. The segment also benefited from higher tariff rates and volumes on its Express Pipeline, which runs from Alberta to Wyoming. However, Spectra Energy Corporation's Distribution and Western Canada Transmission & Processing segments both reported weaker earnings on a lower Canadian dollar, with the latter also seeing lower earnings at its NGL plant in Empress, Alberta.
"Our base business continues to perform well, and I'm pleased to report that we have achieved a renewal rate of about 98% of our contracted revenue on the U.S. natural gas pipelines, which is an indication of the value of our underlying base business," said John Patrick Reddy, the chief financial officer of Spectra, in a conference call.
Spectra has about $700 million in capital-expenditure plans for expansions for the remainder of 2015. The first phase of the company's Dawn-to-Parkway Transmission Line, which is expected to transport up to 442 million standard cubic feet per day of natural gas from Detroit, Michigan, to Parkway, Ontario, is expected to begin service by year's end. Next year's phase, which is being tracked by Industrial Info, is under construction and is expected to be completed toward the end of 2016.
"When this backlog of projects is in service, along with the others we'll place into service this year, investors can expect these projects to generate about $1 billion of EBITDA by 2020," said Gregory Ebel, the chairman, president and chief executive officer of Spectra, in a conference call. "In addition to our backlog of projects in execution, we've got a robust portfolio of opportunities in development that will lead to continued growth in 2018 and beyond, and we're working diligently towards advancing those projects."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
