Spectra Energy Opens New Natural Gas Plant in Canada

North of the border Friday afternoon, Texas-based Spectra Energy (SE) announced the grand opening of its new Dawson Processing Plant for natural gas at a ceremony in Bessborough, B.C. The new plant is part of the company’s $1.5 billion investment and expansion plan, which is slated to end in 2013. Phase I of the plant construction is finished, and the plant is currently running at 50-percent capacity. When the second phase is completed early in 2013, the new plant will process 200 million cubic feet of natural gas each day. There will be 20 permanent employees at the plant.

And this isn’t all for the company, as its regional head said the expansion into British Columbia will continue for the next several years, and the investment will grow by another 300 percent.

“Spectra Energy is executing one of the largest infrastructure projects our sector has witnessed in recent years, and we are poised to invest an additional $4-$6 billion in British Columbia beyond 2015,” said Doug Bloom, president of Spectra Energy Transmission West.  “Accessing the natural gas-rich area of the Montney play enables Spectra Energy to meet the growing needs of our customers with critical gathering, processing and pipeline services, and sets the foundation for further investment opportunities in British Columbia.”

After the market closed Friday, shares in Spectra were up more than 1.3 percent to $29.65 per share.

“Spectra Energy has built an innovative, expandable natural gas processing facility that supports local employment and business development in the Dawson Creek area,” said Christy Clark, Premier of the Province of British Columbia, in the company’s press release. “Natural gas is the opportunity of our lifetime, and this plant is another example of the long-term economic activity natural gas can create with the right support from industry investments and the BC Jobs Plan.”

So far, Spectra said it currently processes 1.6 billion cubic feed per day in its 11 interests just in the Montney play in the western Canada province.

While this may take a while to come to fruition on the bottom line, the expansion news can certainly be looked upon favorably by some hedge funds like Daniel Bubis’ Tetrem Capital Management, Clint Carlson’s Carlson Capital or Michael Lowenstein’s Kensico Capital. These three funds are invested in Spectra to a combined $101 million as of the end of March – Kensico umped in with a #31 million play in Q1 of 2012 and Carlson upped its stake by 30 percent to $32 million; Tetrem, however, had sold 15 percent of its stake in the first quarter, down to $38 million.