The natural gas pipeline, storage and processing company will have a market capitalization of about $15 billion and annual revenue of between $4 billion and $4.5 billion, said Fred Fowler, CEO of Spectra. This would rank it at about 460th on this year's Fortune 500 list.
The new name is the plural of spectrum and is meant to reflect the range of businesses the company is in, from gas transport to processing to end-user delivery, the company said.
Like other natural gas pipeline and product companies, including Kinder Morgan Energy and Enterprise Products Partners, Spectra will also create a master limited partnership, a business structure that pays most of its profits to shareholders, thus avoiding corporate taxes.
"It's a structure we need to use since there are a lot of competitors who are also MLPs," Fowler said.
The MLP would be formed some time in the first half of 2007 and have its own publicly traded stock.
600 in Houston
About 600 of the company's 7,400 employees are based in Houston.
The spinoff of Charlotte, N.C.-based Duke Energy's natural gas business has been planned since 2005. It was put on the back burner when Duke acquired Cinergy in May for about $9 billion, but it should be ready to hit the New York Stock Exchange on Jan. 1 under the symbol "SE," Fowler said.
The new company will combine Duke's natural gas transmission business unit, which is already based in Houston, the Denver-based Duke Energy Field Services business and Union Gas, a retail arm that serves 1.3 million people in Ontario, Canada.
The new entity will be one of the largest natural gas companies in North America, with 17,500 miles of pipelines and extensive natural gas storage capacity.
