How Can Spectra Energy Partners Afford Its $3 Billion Expansion Plan?

By Tyler Crowe – Jul 11, 2014 at 8:15AM

With more than $3 billion in growth capital planned between now and 2016, Spectra Energy Partners doesn't have to lean on shareholders as much as you would think.

Spectra Energy Partners (SEP) has a pretty big appetite for growth right now. With more than $3 billion in gas transmission projects slated to come online between now and 2016, it's positioning itself to be one of the dominant players in a natural gas boom in the Northeast, thanks to the Marcellus and Utica shale formations. Thing is, that growth doesn't just happen and, for a Master Limited Partnership like Spectra, it needs to do most of it either through debt, or equity. So how will it pay for it?

Based on the company's financial standing -- especially compared to competitors ONEOK Partners (OKS) and Williams Partners (NYSE: WPZ) -- and the guidelines for Spectra to keep its investment grade credit rating, it might not need to rely on shareholders as much as you might think. Find out how Spectra Energy Partners' financial position provides it with lots of options by tuning into the video below.

Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com under the handle TMFDirtyBird, on Google+, or on Twitter @TylerCroweFool.

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