Spectra Energy Partners said that the 18% increase resulted mainly from strong demand for transmission and storage services and earnings growth from expansion projects.

It reported cash available for distribution (CAD) of $45.4 million for the quarter, a 24% raise compared to year-ago quarter CAD of $36.7 million.

Clearly, the year is off to a great start, said Greg Rizzo, president and chief executive officer of Spectra Energy Partners. Results for the quarter reflect the successful execution of our solid business strategy — leading to our previously announced sixth consecutive quarter of increased distributions. We enjoyed strong performance across our portfolio of assets and increased revenues from our scalable growth projects.

We look forward to even more revenue growth this year as projects in execution and related contracts come online and from our recent acquisition of the Ozark Gas Transmission (OGT) and Ozark Gas Gathering (OGG) systems from Atlas Pipeline Partners, L.P. (Atlas), continued Rizzo.

Results from Operations

The company has reported operating income of $16 million for the first quarter 2009, compared with operating income of $15.7 million in year-ago quarter. East Tennessee natural gas (ETNG) reported higher firm transportation revenues of $3.1 million related with the Greenway/Nora, Glade Spring and CNX expansion projects. These revenue increases were mostly counterbalanced by transaction costs associated with the acquisition of OGT and OGG.

Equity Investment in Gulfstream

Spectra Energy Partners recognized $6.9 million of equity earnings from its 24.5% interest in Gulfstream in the first quarter 2009, compared with $4.8 million in year-ago quarter. The 2009 period benefited from earnings from the phase III and phase IV projects which were placed into service during the third and fourth quarters of 2008, respectively. For the quarter, the company’s share of Gulfstream’s cash available for distribution was $11.9 million.

Equity Investment in Market Hub Partners (MHP)

Spectra Energy Partners has identified $9.9 million in equity earnings from its 50% interest in MHP in the first quarter 2009, compared with $7.8 million in year-ago quarter. The increased equity earnings for the quarter mainly reflect higher revenues from the Egan Cavern four expansion which was placed into final service during the second quarter of 2008. For the quarter, Spectra Energy Partners’ share of MHP’s cash available for distribution was $10.9 million.

Interest Income and Expense

Interest income was $0.1 million for the first quarter 2009, a decline of $1.4 million compared with year-ago quarter as a result of lower investments in qualified securities. Interest expense for the first quarter 2009 of $4 million represents a $1 million decrease compared year-ago quarter, as a result of favorable interest rates on the revolving credit facility.

Income Tax Expense

Net income tax expense of $0.4 million was reported for the first quarter 2009, compared to $0.8 million in the year-ago quarter. The first quarter 2008 comprised federal income tax expense of Saltville gas storage earlier to its acquisition by Spectra Energy Partners in the second quarter of 2008. As a master limited partnership, Spectra Energy Partners is not subject to federal income taxes.

Capital Expenditures and Equity Investments

During the quarter, Spectra Energy Partners spent $1.8 million for development and maintenance capital at the gas transportation and Storage segment and invested a further $5 million at Gulfstream and $9.6 million at MHP in expansion projects.

Acquisition of Ozark Gas Transmission and Ozark Gas Gathering

On April 7, 2009, Spectra Energy Partners entered into a definitive agreement to obtain OGT and OGG from Atlas for about $300 million in cash. OGT is a 565-mile, Federal Energy Regulatory Commission (FERC) regulated interstate natural gas transmission pipeline system that expands from southeast Oklahoma through Arkansas into southeast Missouri. With interconnects to several interstate pipeline systems, including Spectra Energy Corp.’s Texas Eastern Transmission system, OGT links natural gas supplies in the Fayetteville Shale and Arkoma basin to important regional, Midwest and Northeast markets. OGG is a 365-mile, fee-based natural gas gathering system situated in eastern Oklahoma and western Arkansas. The transaction closed on May 4, 2009.