Enbridge tops up Spectra offer by 10%

Gary Park

for Petroleum News

Canadian multinational energy transportation company Enbridge has dug deeper into its pockets to sweeten its bid to make a complete takeover of Spectra Energy Partners for $4.3 billion, 10 percent more than its initial offer.

Enbridge, which already owns 83 percent of the Houston-based unit of Spectra, is eager to reduce complexity in the wake of its US$37 billion takeover of Spectra Energy, gaining control of a vast network of North American pipelines.

Spectra Energy Partners is a master limited partnership, MLP, and owns interests in pipeline and storage facilities for natural gas and crude oil.

Enbridge said acceptance of its latest offer would deal with a U.S. tax ruling that stopped MLPs from claiming allowances on fees charged to companies which ship crude.

The change reduced the appeal of exploiting the MLPs to help fund billions of dollars in growth projects and prompted Enbridge to initiate buyout offers earlier this year.

Calgary-based Enbridge is selling assets and restructuring operations as part of its C$22 billion program of major projects, including the C$9 billion Line 3 oil pipeline from Alberta to Superior, Wisconsin, that replaces a 60-year-old corroded line and double capacity to 760,000 barrels per day.

So far this year Enbridge has sold assets for C$7.5 billion, including Canadian natural gas gathering and processing facilities - a move welcomed by bond-rating agencies.

- GARY PARK