Discarding the temporary Gas SpinCo Inc. moniker, Charlotte, NC-based Duke Energy announced Monday that its existing natural gas business will be called Spectra Energy Corp. when the operations become a stand-alone, publicly traded company, which is still targeted to take place Jan. 1, 2007.
Once the separation is complete, Spectra Energy will consist of the business unit now known as Duke Energy Gas Transmission and Duke Energy's 50% ownership interest in Duke Energy Field Services, which recently announced its new name -- DCP Midstream.
Spectra Energy will operate primarily in three sectors of the natural gas industry: transmission and storage, distribution, and gathering and processing. The stock is expected to be traded on the New York Stock Exchange under the listing symbol SE.
"Spectra Energy will be well-positioned to pursue significant growth opportunities and respond to the evolving needs of our customers, while providing value for our shareholders," said Fred Fowler, who currently serves as president of Duke Energy Gas and will become CEO of Spectra Energy Corp. "Spectra -- plural of the word spectrum -- reflects the broad range of our businesses, assets and strategic market presence," Fowler said.
In addition, Duke Capital will be renamed Spectra Energy Capital and the Duke Energy Income Fund will be renamed Spectra Energy Income Fund.
Duke Energy originally proposed separating its natural gas business from the company's electric business when the merger with Cinergy was announced in May 2005. In June (see Daily GPI, June 29), Duke Energy's board of directors unanimously authorized management to pursue a plan to spin off Duke Energy's natural gas businesses to Duke Energy shareholders. Once the transaction is completed, Duke Energy's shareholders will own 100% of the equity in both Duke Energy and Spectra Energy.
Earlier this year (see Daily GPI, Oct. 25), Duke estimated the gas company's total capitalization at around $15.4 billion, including $6.17 billion in equity and $8.71 billion worth of debt. In outlining Duke Energy's transition from an "energy superstore" into "two pure-play powerhouses," CEO James Rogers predicted that the new Duke Energy pure-play electric company would grow ongoing diluted earnings per share by an average of 4-6% over at least the next three years through solid organic growth and a 1-1.5%/year increase in electricity demand.
At that time, Duke Chairman Paul M. Anderson said that the new stand-alone gas company is expected to grow ongoing diluted earnings per share by an average of 5-7% over at least the next three years.
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