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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C. 20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF
    THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    001-33556
  SPECTRA ENERGY PARTNERS,
    LP
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)5400 Westheimer Court, Houston, Texas(Address of principal
    executive offices)

41-2232463(I.R.S. Employer
    Identification No.)77056(Zip Code)   713-627-5400
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Units Representing Limited Partner Interests

New York Stock Exchange     o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer þ

Smaller reporting
    company o   Rule 12b-2 o þ




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##### 





SPECTRA
    ENERGY PARTNERS, LP
  FORM 10-K
    FOR THE YEAR ENDED
 DECEMBER
    31, 2007
  TABLE OF
    CONTENTS
   
 Item



PagePART I.1.


Business


4General


4Initial Public Offering


4East Tennessee


5Gulfstream


7Market Hub


8Contract Mix Summary


10Pending Acquisition


10Supplies and Raw Materials


10Regulations


11Environmental Matters


11Employees


12Additional Information


12Glossary


131A.


Risk Factors


151B.


Unresolved Staff Comments


342.


Properties


343.


Legal Proceedings


344.


Submission of Matters to a Vote of Security
    Holders


34PART II.5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


356.


Selected Financial Data


377.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


377A.


Quantitative and Qualitative Disclosures About
    Market Risk


538.


Financial Statements and Supplementary Data


549.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


789A.


Controls and Procedures


789B.


Other Information


78PART III.10.


Directors, Executive Officers and Corporate
    Governance


7811.


Executive Compensation


8312.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


10413.


Certain Relationships and Related Transactions,
    and Director Independence


10514.


Principal Accounting Fees and Services


109PART IV.15.


Exhibits, Financial Statement Schedules


110Signatures


111Exhibit IndexSubsidiariesPower of AttorneyCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification Pursuant to Section 1350Certification Pursuant to Section 1350   2




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CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING INFORMATION
    
    state and federal legislative and regulatory initiatives that
    affect cost and investment recovery, have an effect on rate
    structure, and affect the speed at and degree to which
    competition enters the natural gas industries;
    outcomes of litigation and regulatory investigations,
    proceedings or inquiries;
    weather and other natural phenomena, including the economic,
    operational and other effects of hurricanes and storms;
    the timing and extent of changes in interest rates;
    general economic conditions, including any potential effects
    arising from terrorist attacks and any consequential hostilities
    or other hostilities;
    changes in environmental, safety and other laws and regulations;
    results of financing efforts, including the ability to obtain
    financing on favorable terms, which can be affected by various
    factors, including credit ratings and general economic
    conditions;
    increases in the cost of goods and services required to complete
    capital projects;
    growth in opportunities, including the timing and success of
    efforts to develop domestic pipeline, storage, and other
    infrastructure projects and the effects of competition;
    the performance of natural gas transmission and storage
    facilities;
    the effect of accounting pronouncements issued periodically by
    accounting standard-setting bodies;
    conditions of the capital markets during the periods covered by
    the forward-looking statements; and
    the ability to successfully complete merger, acquisition or
    divestiture plans; regulatory or other limitations imposed as a
    result of a merger, acquisition or divestiture; and the success
    of the business following a merger, acquisition or divestiture.   3




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PART I  Item 1.
    Business. General       Initial
    Public Offering   4




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East
    Tennessee  General
  (MMcf/d).
  
  Customers
    and Contracts
     5




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Source
    of Supply
    Competition
       6




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Gulfstream  General
  700-mile
  
  Customers,
    Contracts and Supply
     7




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Competition
     Market
    Hub  General
    38-mile
 8




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20-mile
  
  Customer,
    Contracts and Supply
         9




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Competition
   Contract
    Mix Summary    % of PhysicalRevenue Composition%

CapacityFirm Contracts



Subscribed

Weighted AverageCapacity

Variable

Interruptible

Under

Remaining ContractAsset

Reservation Fees

Fees

Contracts

Firm Contracts

Life (in years)(a)East Tennessee


98
%


1
%


1
%


96
%


9Gulfstream


93



3



4



68



19Market Hub


83







17



100



3     (a)
    
    The average life of each contract is calculated based on
    contract revenues. Pending
    Acquisition  P-25 P-25 72-mile,
 Supplies
    and Raw Materials       10




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Regulations          cost-of-service case-by-case cost-of-service
 Environmental
    Matters      
    The Clean Air Act, or CAA, and the 1990 amendments to the CAA,
    as well as state laws and regulations affecting air emissions
    (including State Implementation Plans related to existing and
    new national ambient air quality standards), which may limit new
    sources of air emissions. Spectra Energy Partners natural
    gas transmission and storage assets are considered sources of
    air emissions and thus are subject to the CAA. Owners
    and/or
    operators of air emission sources, such as Spectra Energy
    Partners, are responsible for obtaining permits for existing and
    new sources of air emissions and for annual compliance and
    reporting.
    The Federal Water Pollution Control Act, which requires permits
    for facilities that discharge wastewaters into the environment.
    The Oil Pollution Act (OPA), was enacted in 1990 and amends
    parts of the Clean Water Act and other statutes as they pertain
    to the prevention of and response to oil spills. OPA imposes
    certain spill prevention, control and countermeasure
    requirements. Although Spectra Energy Partners is primarily a
    natural gas business, OPA affects its business primarily because
    of the presence of liquid hydrocarbons (condensate) in its
    offshore pipeline. 11




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
    The Solid Waste Disposal Act, as amended by the Resource
    Conservation and Recovery Act, which requires certain solid
    wastes, including hazardous wastes, to be managed pursuant to a
    comprehensive regulatory regime. As part of its business,
    Spectra Energy Partners generates solid waste within the scope
    of these regulations and therefore must comply with such
    regulations.
    The National Environmental Policy Act, which requires federal
    agencies to consider potential environmental effects in their
    decisions, including siting approvals. Many of Spectra Energy
    Partners projects require federal agency review, and
    therefore the environmental effect of proposed projects is a
    factor in determining whether Spectra Energy Partners will be
    permitted to complete proposed projects.     Employees   Additional
    Information  713-627-5400. Form 10-K, Form 10-Q, Form 8-K 1-800-SEC-0330. http://www.sec.gov. http://www.spectraenergypartners.com.
 12




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Glossary    Allowance for Funds Used During Construction
    (AFUDC).
  Available Cash:
                British Thermal Unit (Btu).
  Cubic Foot (cf).
  Derivative.
  Cumulative Common Unit Arrearage.
  Environmental Protection Agency (EPA).
  Federal Energy Regulatory Commission
    (FERC).
 13




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Liquefied Natural Gas (LNG).
  Local Distribution Company (LDC).
  Operating Expenditures.
                Operating Surplus.
             14




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Subordination Period.
              one-for-one
  Throughput.
  Transmission System.
  Item 1A.
    Risk
    Factors.    Risks
    Related to Spectra Energy Partners Business
  Spectra
    Energy Partners may not have sufficient cash from operations to
    enable it to make cash distributions to holders of common and
    subordinated units.
    
    the rates charged for transportation and storage services, and
    the volumes of natural gas customers transport and store;
    the overall demand for natural gas in the Southeastern and
    Mid-Atlantic regions of the United States and the quantities of
    natural gas available for transport, especially from the Gulf of
    Mexico, Appalachian and Mid-Continent areas; 15




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
    regulatory action affecting the demand for natural gas, the
    supply of natural gas, the rates Spectra Energy Partners can
    charge, contracts for services, existing contracts, operating
    costs and operating flexibility;
    regulatory and economic limitations on the development of LNG
    import terminals in the Gulf Coast region;
    successful development of LNG import terminals in the eastern or
    northeastern United States, which could reduce the need for
    natural gas to be transported on the East Tennessee pipeline
    system and for the development of additional natural gas storage
    capacity in the Gulf Coast region; and
    the level of operating and maintenance, and general and
    administrative costs.    
    the level of capital expenditures to complete construction
    projects;
    the cost and form of payment of acquisitions;
    debt service requirements and other liabilities;
    fluctuations in working capital needs;
    the ability to borrow funds and access capital markets;
    restrictions on distributions contained in debt
    agreements; and
    the amount of cash reserves established by Spectra Energy
    Partners general partner.  Gulfstream
    and Market Hub are controlled by Spectra Energy and other third
    parties who are responsible for the management and operations of
    those assets. As a result, Spectra Energy Partners cannot
    control the amount of cash that will be received from Gulfstream
    and Market Hub, and Spectra Energy Partners may be required to
    contribute significant cash to fund their
    operations.
      Natural
    gas transportation and storage operations are subject to
    regulation by FERC, which could have an adverse effect on the
    ability to establish transportation and storage rates that would
    allow Spectra Energy Partners to recover the full cost of
    operating its pipelines, including a reasonable return, and its
    ability to make distributions.
     16




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Certain
    transportation services are subject to long-term, fixed-price
    negotiated rate contracts that are not subject to
    adjustment, even if the cost to perform services exceeds the
    revenues received from such contracts, and, as a result, Spectra
    Energy Partners costs could exceed revenues received under
    these contracts.
    Market
    Hubs right to charge market-based rates at one
    of its facilities is subject to the continued existence of
    certain conditions related to the competitive position of Market
    Hub and, if those conditions change, the right to charge
    market-based rates could be
    terminated.
    Increased
    competition from alternative natural gas transportation and
    storage options and alternative fuel sources could have a
    significant financial effect on Spectra Energy
    Partners.
     17




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Any
    significant decrease in supplies of natural gas in Spectra
    Energy Partners areas of operation could adversely affect
    business and operating results, and reduce cash available for
    distribution.
      The
    failure of LNG import terminals to be successfully developed in
    the Gulf Coast region or the successful development of LNG
    import terminals outside Spectra Energy Partners areas of
    operations could reduce the demand for Spectra Energy
    Partners services.
    
    new projects may fail to be developed;
    new projects may not be developed at their announced capacity;
    development of new projects may be significantly delayed;
    new projects may be built in locations that are not connected to
    Spectra Energy Partners systems; or
    new projects may not influence sources of supply on Spectra
    Energy Partners systems.      Spectra
    Energy Partners may not be able to maintain or replace expiring
    natural gas transportation and storage contracts at favorable
    rates.
   18




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
    the level of existing and new competition to deliver natural gas
    to Spectra Energy Partners markets;
    the growth in demand for natural gas in Spectra Energy
    Partners markets;
    whether the market will continue to support long-term contracts;
    whether Spectra Energy Partners business strategy
    continues to be successful; and
    the effects of state regulation on customer contracting
    practices.  2007-2012.
    Spectra
    Energy Partners and its equity affiliates depend on certain key
    customers for a significant portion of their revenues. The loss
    of any of these key customers could result in a decline in
    revenues and cash available to make distributions.
    If
    third-party pipelines and other facilities interconnected to
    Spectra Energy Partners pipelines, and facilities become
    unavailable to transport natural gas, revenues and cash
    available to make distributions could be adversely
    affected.
   19




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Neither
    Gulfstream nor Market Hub is prohibited from incurring
    indebtedness, which may affect Spectra Energy Partners
    ability to make distributions.
    If
    Spectra Energy Partners does not complete expansion projects or
    make and integrate acquisitions, future growth may be
    limited.
    
    an inability to identify attractive expansion projects or
    acquisition candidates or is outbid by competitors;
    an inability to obtain necessary rights of way or government
    approvals, including regulatory agencies;
    an inability to integrate successfully the businesses it builds
    or acquires;
    Spectra Energy Partners is unable to raise financing for such
    expansions projects or acquisitions on economically acceptable
    terms;
    incorrect assumptions about volumes, reserves, revenues and
    costs, including synergies and potential growth; or
    the inability to secure adequate customer commitments to use the
    newly expanded or acquired facilities.  Acquisitions
    or expansion projects that appear to be accretive may
    nevertheless reduce Spectra Energy Partners cash from
    operations on a per unit basis.
    
    a decrease in liquidity as a result of using a significant
    portion of Available Cash or borrowing capacity to finance the
    project or acquisition;
    an inability to complete expansion projects on schedule or
    within the budgeted cost due to the unavailability of required
    construction personnel, equipment or materials, and the risk of
    cost overruns resulting from inflation or increased costs of
    materials, labor and equipment;
    an inability to complete expansion projects on schedule due to
    accidents, weather conditions or an inability to obtain
    necessary permits;
    an inability to receive cash flows from a newly built or
    acquired asset until it is operational;
    unforeseen difficulties operating in new product areas or new
    geographic areas; and
    customer losses at the acquired business.   20




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The
    amount of cash available for distribution depends primarily on
    cash flow and not solely on profitability, which may prevent
    Spectra Energy Partners from making cash distributions during
    periods when net income is recorded.
    Significant
    prolonged changes in natural gas prices could affect supply and
    demand, reducing throughput on Spectra Energy Partners
    systems and adversely affecting revenues and cash available to
    make distributions over the long-term.
  park-and-lend
  Operations
    are subject to environmental laws and regulations that may
    expose Spectra Energy Partners to significant costs and
    liabilities.
      Spectra
    Energy Partners may incur significant costs and liabilities as a
    result of pipeline integrity management program testing and any
    necessary pipeline repair or preventative or remedial
    measures.
    
    perform ongoing assessments of pipeline integrity;
    identify and characterize applicable threats to pipeline
    segments that could affect a high consequence area;
    improve data collection, integration and analysis; 21




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
    repair and remediate the pipeline as necessary; and
    implement preventive and mitigating actions.    Spectra
    Energy Partners does not own all of the land on which its
    pipelines and facilities are located, which could disrupt
    operations.
  and/or
  Spectra
    Energy Partners operations are subject to operational
    hazards and unforeseen interruptions.
    
    damage to pipelines, facilities and related equipment caused by
    hurricanes, tornadoes, floods, fires and other natural
    disasters, explosions and acts of terrorism;
    inadvertent damage from third parties, including from
    construction, farm and utility equipment;
    leaks of natural gas and other hydrocarbons or losses of natural
    gas as a result of the malfunction of equipment or facilities;
    collapse of storage caverns;
    operator error;
    environmental pollution;
    explosions and blowouts;
    risks related to underwater pipelines in the Gulf of Mexico,
    which are susceptible to damage from shifting as a result of
    water currents (as seen in the Gulf of Mexico following
    Hurricanes Katrina and Rita), as well as damage from vessels;
    risks related to pipeline that traverses areas in Florida where
    karst conditions exist. Karst conditions refers to terrain,
    usually found where limestone or other carbonate rock is
    present, that may subside or result in a sinkhole collapse when
    the underlying water table changes; and
    risks related to operating in a marine environment.  and/or
  Spectra
    Energy Partners does not insure against all potential losses and
    could be seriously harmed by unexpected
    liabilities.
   22




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Spectra
    Energy Partners debt levels may limit its flexibility in
    obtaining additional financing and in pursuing other business
    opportunities.
    
    the ability to obtain additional financing, if necessary, for
    working capital, capital expenditures, acquisitions or other
    purposes may be impaired or such financing may not be available
    on favorable terms;
    Spectra Energy Partners will need a substantial portion of its
    cash flow to make principal and interest payments on its
    indebtedness, reducing the funds that would otherwise be
    available for operations, future business opportunities and
    distributions to unitholders; and
    Spectra Energy Partners debt level could make it more
    vulnerable than its competitors with less debt to competitive
    pressures or a downturn in Spectra Energy Partners
    business or the economy in general.    Restrictions
    in Spectra Energy Partners credit facility may interrupt
    distributions to Spectra Energy Partners from its subsidiaries,
    which will limit its ability to make distributions and may limit
    the ability to capitalize on acquisition and other business
    opportunities.
    
    make distributions if any default or event of default occurs;
    make other restricted distributions or dividends on account of
    the purchase, redemption, retirement, acquisition, cancellation
    or termination of partnership interests;
    incur additional indebtedness or guarantee other indebtedness; 23




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
    grant liens or make certain negative pledges;
    make certain loans or investments;
    engage in transactions with affiliates;
    make any material change to the nature of Spectra Energy
    Partners business from the midstream energy business;
    dispose of assets; or
    enter into a merger, consolidate, liquidate, wind up or dissolve.    The
    credit and risk profile of Spectra Energy Partners general
    partner and its owner, Spectra Energy, could adversely affect
    Spectra Energy Partners credit ratings and risk profile,
    which could increase borrowing costs or hinder the ability to
    raise capital.
      Terrorist
    attacks, and the threat of terrorist attacks, have resulted in
    increased costs to Spectra Energy Partners business.
    Continued hostilities in the Middle East or other sustained
    military campaigns may adversely affect Spectra Energy
    Partners results of operations.
   24




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Risks
    Inherent in an Investment in Spectra Energy Partners
  Spectra
    Energy controls Spectra Energy Partners general partner,
    which has sole responsibility for conducting Spectra Energy
    Partners business and managing its operations. Spectra
    Energy Partners general partner and its affiliates,
    including Spectra Energy, have conflicts of interest with
    Spectra Energy Partners and limited fiduciary duties, and may
    favor their own interests to the detriment of Spectra Energy
    Partners.
    
    neither Spectra Energy Partners partnership agreement nor
    any other agreement requires Spectra Energy to pursue a business
    strategy that favors Spectra Energy Partners. Spectra
    Energys directors and officers have a fiduciary duty to
    make these decisions in the best interests of the owners of
    Spectra Energy, which may be contrary to Spectra Energy
    Partners interests;
    the general partner is allowed to take into account the
    interests of parties other than Spectra Energy Partners, such as
    Spectra Energy and its affiliates, in resolving conflicts of
    interest;
    Spectra Energy and its affiliates are not limited in their
    ability to compete with Spectra Energy Partners;
    the general partner may make a determination to receive a
    quantity of Spectra Energy Partners Class B units in
    exchange for resetting the target distribution levels related to
    its incentive distribution rights without the approval of the
    Conflicts Committee of Spectra Energy Partners general
    partner or Spectra Energy Partners unitholders;
    some officers of Spectra Energy who provide services to Spectra
    Energy Partners also will devote significant time to the
    business of Spectra Energy, and will be compensated by Spectra
    Energy for the services rendered to it;
    the general partner has limited its liability and reduced its
    fiduciary duties, and has also restricted the remedies available
    to Spectra Energy Partners unitholders for actions that,
    without the limitations, might constitute breaches of fiduciary
    duty. By purchasing common units, unitholders will be deemed to
    have consented to some actions and conflicts of interest that
    might otherwise constitute a breach of fiduciary or other duties
    under applicable law;
    the general partner determines the amount and timing of asset
    purchases and sales, borrowings, issuances of additional
    partnership securities and reserves, each of which can affect
    the amount of cash that is distributed to unitholders;
    the general partner determines the amount and timing of any
    capital expenditures and, based on the applicable facts and
    circumstances, whether a capital expenditure is classified as a
    maintenance capital expenditure (which reduces operating
    surplus) or an expansion capital expenditure (which does not
    reduce operating surplus). This determination can affect the
    amount of cash that is distributed to unitholders and the
    ability of the subordinated units to convert to common units; 25




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
    the general partner determines which costs incurred by it and
    its affiliates are reimbursable by Spectra Energy Partners;
    in some instances, the general partner may cause Spectra Energy
    Partners to borrow funds in order to permit the payment of cash
    distributions, even if the purpose or effect of the borrowing is
    to make a distribution on the subordinated units, to make
    incentive distributions or to accelerate the expiration of the
    subordination period;
    Spectra Energy Partners partnership agreement does not
    restrict the general partner from causing Spectra Energy
    Partners to pay it or its affiliates for any services rendered
    to Spectra Energy Partners or entering into additional
    contractual arrangements with any of these entities on Spectra
    Energy Partners behalf;
    the general partner intends to limit its liability regarding
    Spectra Energy Partners contractual and other obligations
    and, in some circumstances, is entitled to be indemnified by
    Spectra Energy Partners;
    the general partner may exercise its limited right to call and
    purchase common units if it and its affiliates own more than 80%
    of the common units;
    the general partner controls the enforcement of obligations owed
    to Spectra Energy Partners by the general partner and its
    affiliates; and
    the general partner decides whether to retain separate counsel,
    accountants or others to perform services for Spectra Energy
    Partners.  Affiliates
    of the general partner, including Spectra Energy, DCP Midstream,
    LLC and DCP Midstream Partners, LP, are not limited in their
    ability to compete with Spectra Energy Partners, which could
    limit commercial activities or the ability to acquire additional
    assets or businesses.
    If a
    unitholder is not an Eligible Holder, they will not be entitled
    to receive distributions or allocations of income or loss on
    common units and those common units will be subject to
    redemption at a price that may be below the current market
    price.
   26




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Cost
    reimbursements to the general partner and its affiliates for
    services provided, which will be determined by the general
    partner, will be substantial and will reduce Spectra Energy
    Partners cash available for distribution.
    The
    partnership agreement limits the general partners
    fiduciary duties to holders of Spectra Energy Partners
    common and subordinated units, and restricts the remedies
    available to holders of common and subordinated units for
    actions taken by the general partner that might otherwise
    constitute breaches of fiduciary duty.
    
    permits the general partner to make a number of decisions in its
    individual capacity, as opposed to in its capacity as Spectra
    Energy Partners general partner. This entitles the general
    partner to consider only the interests and factors that it
    desires, and it has no duty or obligation to give any
    consideration to any interest of, or factors affecting Spectra
    Energy Partners, Spectra Energy Partners affiliates or any
    limited partner;
    provides that the general partner will not have any liability to
    Spectra Energy Partners or Spectra Energy Partners
    unitholders for decisions made in its capacity as a general
    partner so long as it acted in good faith, meaning it believed
    the decision was in the best interests of Spectra Energy
    Partners partnership;
    generally provides that affiliated transactions and resolutions
    of conflicts of interest not approved by the Conflicts Committee
    of the board of directors of the general partner acting in good
    faith and not involving a vote of unitholders must be on terms
    no less favorable to Spectra Energy Partners than those
    generally being provided to or available from unrelated third
    parties or must be fair and reasonable to Spectra
    Energy Partners, as determined by the general partner in good
    faith. In determining whether a transaction or resolution is
    fair and reasonable, the general partner may
    consider the totality of the relationships between the parties
    involved, including other transactions that may be particularly
    advantageous or beneficial to unitholders;
    provides that the general partner and its officers and directors
    will not be liable for monetary damages to Spectra Energy
    Partners, Spectra Energy Partners limited partners or
    assignees for any acts or omissions unless there has been a
    final and non-appealable judgment entered by a court of
    competent jurisdiction determining that the general partner or
    those other persons acted in bad faith or engaged in fraud or
    willful misconduct or, in the case of a criminal matter, acted
    with knowledge that the conduct was criminal; and
    provides that in resolving conflicts of interest, it will be
    presumed that in making its decision the general partner or its
    Conflicts Committee acted in good faith, and in any proceeding
    brought by or on behalf of any limited partner or Spectra Energy
    Partners, the person bringing or prosecuting such proceeding
    will have the burden of overcoming such presumption. 27




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The
    general partner may elect to cause Spectra Energy Partners to
    issue Class B units to the general partner in connection
    with a resetting of the target distribution levels related to
    the general partners incentive distribution rights without
    the approval of the Conflicts Committee of the general partner
    or holders of Spectra Energy Partners common units and
    subordinated units. This may result in lower distributions to
    holders of Spectra Energy Partners common units in certain
    situations.
      Holders
    of Spectra Energy Partners common units have limited
    voting rights and are not entitled to elect Spectra Energy
    Partners general partner or its directors, which could
    reduce the price at which the common units will
    trade.
    Even
    if holders of Spectra Energy Partners common units are
    dissatisfied, they cannot initially remove Spectra Energy
    Partners general partner without its
    consent.
  2 3
 28




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Spectra
    Energy Partners partnership agreement restricts the voting
    rights of unitholders owning 20% or more of Spectra Energy
    Partners common units.
    Spectra
    Energy Partners has a holding company structure in which the
    subsidiaries conduct operations and own operating assets, which
    may affect Spectra Energy Partners ability to make
    distributions.
    If
    Spectra Energy Partners is deemed an investment
    company under the Investment Company Act of 1940, it would
    adversely affect the price of its common units and could have a
    material adverse effect on its business.
   29




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Control
    of the general partner may be transferred to a third party
    without unitholder consent.
    Increases
    in interest rates could adversely affect Spectra Energy
    Partners unit price and the ability to issue additional
    equity to make acquisitions, incur debt or for other
    purposes.
  50-year
  Spectra
    Energy Partners may issue additional units without the common
    unitholders approval, which would dilute existing common
    unitholders ownership interests.
    
    each unitholders proportionate ownership interest in
    Spectra Energy Partners will decrease;
    the amount of cash available for distribution on each unit may
    decrease;
    because a lower percentage of total outstanding units will be
    subordinated units, the risk that a shortfall in the payment of
    the minimum quarterly distribution will be borne by Spectra
    Energy Partners common unitholders will increase;
    the ratio of taxable income to distributions may increase;
    the relative voting strength of each previously outstanding unit
    may be diminished; and
    the market price of the common units may decline.  Spectra
    Energy and its affiliates may sell units in the public or
    private markets, which sales could have an adverse effect on the
    trading price of the common units.
   30




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##### Table of Contents



The
    general partner has a limited call right that may require a
    common unitholder to sell the unitholders units at an
    undesirable time or price.
    A
    common unitholders liability may not be limited if a court
    finds that unitholder action constitutes control of Spectra
    Energy Partners business.
    
    Spectra Energy Partners was conducting business in a state but
    had not complied with that particular states partnership
    statute; or
    A common unitholders right to act with other unitholders
    to remove or replace the general partner, to approve some
    amendments to Spectra Energy Partners partnership
    agreement or to take other actions under the partnership
    agreement constitutes control of its business.  Unitholders
    may have liability to repay distributions that were wrongfully
    distributed to them.
  Section 17-607
    Spectra
    Energy Partners will incur increased costs as a result of being
    a publicly-traded partnership.
   31




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##### Table of Contents



Tax Risks
    to Common Unitholders
  Spectra
    Energy Partners tax treatment depends on Spectra Energy
    Partners status as a partnership for federal income tax
    purposes, as well as Spectra Energy Partners not being
    subject to a material amount of entity-level taxation by
    individual states. If the Internal Revenue Service (the IRS)
    treats Spectra Energy Partners as a corporation or Spectra
    Energy Partners becomes subject to a material amount of
    entity-level taxation for state tax purposes, it would
    substantially reduce the amount of cash available for
    distribution.
          An IRS
    contest of the federal income tax positions Spectra Energy
    Partners takes may adversely affect the market for Spectra
    Energy Partners common units, and the cost of any IRS
    contest will reduce cash available for
    distribution.
    The
    unitholder may be required to pay taxes on the unitholders
    share of Spectra Energy Partners income even if the
    unitholder does not receive any cash
    distributions.
   32




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##### Table of Contents



Tax
    gain or loss on disposition of Spectra Energy Partners
    common units could be more or less than expected.
    Tax-exempt
    entities and foreign persons face unique tax issues from owning
    common units that may result in adverse tax consequences to
    them.
  non-U.S. persons non-U.S. persons non-U.S. persons
  Spectra
    Energy Partners will treat each purchaser of common units as
    having the same tax benefits without regard to the actual common
    units purchased. The IRS may challenge this treatment, which
    could adversely affect the value of the common
    units.
    Spectra
    Energy Partners has adopted certain valuation methodologies that
    may result in a shift of income, gain, loss and deduction
    between the general partner and the unitholders. The IRS may
    challenge this treatment, which could adversely affect the value
    of the common units.
     33




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##### Table of Contents



The
    sale or exchange of 50% or more of Spectra Energy Partners
    capital and profits interests during any twelve-month period
    will result in the termination of the partnership for federal
    income tax purposes.
    A
    common unitholder will likely be subject to state and local
    taxes and return filing requirements in states where the common
    unitholder does not live as a result of investing in Spectra
    Energy Partners common units.
    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.  713-627-5400.
    Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   34




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.    Common
    Unit Data by Quarter
  Unit Price Range(a)

Distributions per

Distributions per2007

High

Low

Common Unit

Subordinated UnitSecond Quarter(b)

$
29.29


$
26.50







Third Quarter

$
30.99


$
24.65







Fourth Quarter

$
26.73


$
23.70


$
0.30


$
0.30     (a)
    
    Unit prices represent the
    intra-day
    high and low unit price.(b)
    
    Since June 27, 2007, the commencement date of trading.    Market
    Repurchases
    Distributions
    of Available Cash
  General.
  Definition of Available Cash.
  
    less the amount of cash reserves established by the general
    partner to:  
    provide for the proper conduct of business;
    comply with applicable law, any debt instrument or other
    agreement; or
    provide funds for distributions to Spectra Energy Partners
    unitholders and to Partners general partner for any one or
    more of the next four quarters;  
    plus, if the general partner so determines, all or a portion of
    cash on hand on the date of determination of Available Cash for
    the quarter.    Minimum Quarterly Distribution.
 35




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##### Table of Contents



General Partner Interest and Incentive Distribution
    Rights.
    Equity
    Compensation Plans
   36




---



##### Table of Contents



Item 6.
    Selected
    Financial Data.    Basis of Presentation.
  2007

2006

2005

2004

2003(In millions, except per-unit amounts)Statements of OperationsOperating revenues

$
100.1


$
82.6


$
80.0


$
81.7


$
65.9Operating income


54.1



37.6



26.5



33.6



26.6Equity in earnings of unconsolidated affiliates


55.6



41.1



46.3



35.5



28.4Net income


197.5
(a)


61.6



57.0



53.2



50.7Net Income per Limited Partner Unit(b)Common unit

$
0.68



n/a



n/a



n/a



n/aSubordinated unit


0.68



n/a



n/a



n/a



n/aCash distributions declared per unit


0.30



n/a



n/a



n/a



n/a   December 31,2007

2006

2005

2004

2003(In millions)Balance SheetTotal assets

$
1,507.6


$
1,284.6


$
1,202.8


$
1,303.0


$
1,258.1Long-term debt


400.0



150.0



150.0



150.0



150.0     (a)
    
    Includes a one-time benefit of $110.5 million from the
    reversal of deferred income tax liabilities.(b)
    
    Reflective of general and limited partners interests in
    Net Income since the closing of Spectra Energy Partners
    IPO on July 2, 2007. See Item 8. Financial Statements
    and Supplementary Data, Note 5 for further discussion.n/a
    
    indicates not applicable  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  INTRODUCTION
    EXECUTIVE
    OVERVIEW
     37




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##### Table of Contents



Business
    Strategies
    
    Pursue economically attractive organic expansion
    opportunities and greenfield construction
    projects.  Spectra Energy Partners and its
    partners, including Spectra Energy, continually evaluate organic
    expansion and greenfield construction opportunities in existing
    and new markets that may increase the volume of natural gas and
    storage capacity reserved on Spectra Energy Partners
    systems.
    Increase contracted capacity for natural gas transportation
    and storage on Spectra Energy Partners systems by further
    expanding Spectra Energy Partners customer base and
    diverse sources of natural gas supply.  Spectra
    Energy Partners transportation and storage systems have
    access to numerous natural gas producing regions, including the
    Gulf Coast, Mid-Continent and Appalachian regions. Additionally,
    Spectra Energy Partners is seeking to attach new sources of
    supply, including LNG, to enhance the attractiveness of its
    system to current and future customers.
    Optimize Spectra Energy Partners existing assets and
    achieving additional operating
    efficiencies.  Spectra Energy Partners intends to
    enhance the profitability of its existing assets by undertaking
    additional initiatives to enhance utilization, improve operating
    efficiencies and develop rate and contract structures that meet
    its customers needs.
    Grow through strategic and accretive acquisitions of assets
    from third parties, Spectra Energy or
    both.  Spectra Energy Partners intends to expand
    its existing natural gas transportation and storage businesses
    by pursuing acquisitions that are accretive to distributable
    cash flow. Either independently or jointly with Spectra Energy,
    Spectra Energy Partners will seek future acquisitions in areas
    where its assets currently operate that provide the opportunity
    for operational efficiencies or higher capacity utilization of
    its existing assets, as well as acquisitions in new geographic
    areas of operation in order to expand its footprint.  Significant
    Economic Factors for Spectra Energy Partners
    Business
     38




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##### Table of Contents



Supply
    and Demand Dynamics
    Growing
    Markets
  2006-2012.
  Growth
    of Natural Gas Storage Facilities
    Regulation
   39




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##### Table of Contents



RESULTS
    OF OPERATIONS
  2007


2006


2005(In millions)Operating revenues

$
100.1


$
82.6


$
80.0Operating, maintenance and other expenses


22.8



26.0



29.9Depreciation and amortization


23.2



19.0



23.6Operating income


54.1



37.6



26.5Equity in earnings of unconsolidated affiliates


55.6



41.1



46.3Other income and expenses, net


0.3



1.8



0.5Interest income


5.5







Interest expense


17.1



8.2



8.5Earnings before income taxes


98.4



72.3



64.8Income tax expense (benefit)


(99.1
)


10.7



7.8Net income

$
197.5


$
61.6


$
57.0Adjusted EBITDA(a)

$
77.3


$
56.6


$
50.1Cash Available for Distribution(a)


117.7



80.4



77.5     (a)
    
    For a reconciliation of this measure to its most directly
    comparable financial measures calculated and presented in
    accordance with generally accepted accounting principles, see
    Reconciliation of Non-GAAP Measures.  Operating
    Revenues
  2007 Compared to 2006.
  2006 Compared to 2005.
  Operating,
    Maintenance and Other
  2007 Compared to 2006.
  
    an $11.0 million increase in net pipeline fuel recoveries
    that reduced operating costs in 2007. The higher net recoveries
    primarily resulted from a timing difference related to the
    recognition of recoveries.
    a $1.4 million decrease in ad valorem taxes as a result of
    lower negotiated 2007 rates, partially offset by
    a $5.7 million increase due to net capitalization in 2006
    of previously expensed project development costs for Jewell
    Ridge. Spectra Energy Partners expenses project development
    costs until such time as recovery of costs is determined to be
    probable. At that time, these costs are capitalized to property,
    plant and equipment and operating expenses are reduced,
    a $2.1 million increase due to lower capitalization of
    certain corporate overhead expenses as a result of lower capital
    spending in 2007 as compared to 2006, and
    a $1.9 million increase in pipeline integrity costs in the
    2007 period.  2006 Compared to 2005.
  
    an $11.4 million decrease in expenses primarily resulting
    from $5.7 million of net capitalization of previously
    expensed development costs of Jewell Ridge in 2006 compared to
    $5.7 million in project development costs expensed in 2005,
    partially offset by
    a $3.5 million increase in pipeline integrity costs in the
    2006 period, 40




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##### Table of Contents




    a $3.1 million increase in allocations from Spectra Energy
    related to financial re-engineering and other project
    costs, and
    a $1.2 million increase in insurance costs as a result of
    higher insurance market rates.  Depreciation
    and Amortization
  2007 Compared to 2006.
  2006 Compared to 2005.
  Equity
    in Earnings of Unconsolidated Affiliates
  2007 Compared to 2006.
  2006 Compared to 2005.
    Increase





Increase2007


2006


(Decrease)


2005


(Decrease)(In millions)GulfstreamOperating revenues

$
185.3


$
180.3


$
5.0


$
145.1


$
35.2Operating, maintenance and other expenses


15.9



33.1



(17.2
)


24.4



8.7Depreciation and amortization


30.0



30.4



(0.4
)


29.2



1.2Gain on sales of other assets, net






0.1



(0.1
)






0.1Other income and expenses, net


3.9



0.3



3.6



1.8



(1.5
)Interest expense


47.9



48.8



(0.9
)


25.5



23.3Net income

$
95.4


$
68.4


$
27.0


$
67.8


$
0.6Spectra Energy Partners 24.5% share

$
23.5


$
16.8


$
6.7


$
16.6


$
0.2   Gulfstream 
    Owned 24.5%
  2007 Compared to 2006.
  
    a $5.0 million increase in revenues related to increased
    demand for transportation services due to warmer summer weather
    and a favorable gas to oil commodity price relationship for
    Gulfstreams generation customers,
    a $5.0 million decrease in expenses primarily resulting
    from $2.5 million of capitalization of previously expensed
    project development costs of the Phase IV expansion project
    in 2007 compared to $2.8 million in project development
    costs expensed in 2006,
    a $12.2 million decrease in ad valorem taxes primarily as a
    result of favorable valuations, and
    a $3.6 million increase in other income and expenses, net
    primarily due to a 2006 charge related to a sales and use tax
    matter, increased interest income and increased AFUDC resulting
    from higher capital spending in 2007. 41




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##### Table of Contents



2006 Compared to 2005.
  
    a $38.5 million increase in natural gas transportation
    revenues primarily from significant new firm transportation
    contracts as a result of Gulfstreams Phase II
    expansion completed in June 2005, partially offset by
    a $3.3 million decrease in other revenue due to lower
    interruptible services as a result of higher demand in 2005
    created by the more active 2005 hurricane season compared to
    2006,
    an $8.7 million increase in operating and maintenance
    expenses primarily due to $2.9 million of increased project
    development costs for Phase III and Phase IV expansion
    projects, $2.1 million of higher property and liability
    premiums due to increased insurance rates for wind-storm
    insurance coverage, and $2.8 million increase in Florida
    property taxes, and
    a $23.3 million increase in interest expense as a result of
    $850 million in project financing entered into in October
    2005.  Increase





Increase2007


2006


(Decrease)


2005


(Decrease)(In millions)Market HubOperating revenues

$
91.3


$
78.8


$
12.5


$
78.0


$
0.8Operating, maintenance and other expenses


23.6



30.3



(6.7
)


12.9



17.4Depreciation and amortization


9.1



7.8



1.3



6.9



0.9Gains on sales of other assets


7.0



10.6



(3.6
)


1.2



9.4Interest income


2.3







2.3







Interest expense


3.6



2.6



1.0







2.6Income tax expense


0.1







0.1







Net income

$
64.2


$
48.7


$
15.5


$
59.4


$
(10.7
)Spectra Energy Partners 50% share

$
32.1


$
24.3


$
7.8


$
29.7


$
(5.4
)   Market
    Hub  Owned 50%
  2007 Compared to 2006.
  
    a $12.5 million increase in revenues primarily resulting
    from a $6.7 million increase in new firm storage revenues
    associated with additional Egan storage capacity that was placed
    in service during the third quarter 2006 and a $5.8 million
    increase resulting from higher demand for short-term
    interruptible storage services,
    a $6.7 million decrease in operating expenses, primarily
    driven by a $4.6 million decrease in corporate costs
    charged by Spectra Energy in 2007 as compared to allocated costs
    from Duke Energy Corporation in 2006, and a $1.7 million
    reduction in property and other taxes due to the favorable
    resolution of ad valorem tax matters in 2007, and
    $2.3 million of interest income from affiliates recognized
    in 2007 related to notes receivable from affiliates, partially
    offset by
    a $3.6 million decrease in gains on sales of other assets
    primarily as a result of property insurance gain in 2006 of
    $10.6 million as compared to $7.0 million in 2007.
    a $1.3 million increase in depreciation primarily due to an
    Egan expansion project placed in service in 2006. 42




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##### Table of Contents



2006 Compared to 2005.
  
    a $17.4 million increase in operating expenses primarily
    attributable to a $6.2 million fuel loss in 2006,
    $3.8 million in higher operations costs due to compressor
    overhauls and general maintenance costs and a $4.1 million
    increase in corporate costs in 2006 primarily from insurance and
    allocations, partially offset by
    a $0.8 million increase in operating revenues, which
    included a $9.2 million increase in firm storage revenues
    arising from expanded storage capacity and higher realized rates
    and a $2.8 million increase in interruptible storage
    revenues, partially offset by $6.2 million of business
    interruption insurance proceeds received in 2005 associated with
    lost revenue related to the 2004 cavern well-head fire at Moss
    Bluff and a $4.2 million gain in 2005 in net fuel
    recoveries from customers, and
    a $9.4 million net increase in gains on sales of other
    assets principally due to the recognition of a $9.8 million
    gain from the property insurance settlement related to the 2004
    cavern well-head fire at Moss Bluff.  Other
    Income and Expenses, Net
    Interest
    Income
  2007 Compared to 2006.
  2006 Compared to 2005.
  Interest
    Expense
  2007 Compared to 2006.
  2006 Compared to 2005.
  Income
    Tax Expense (Benefit)
  2007 Compared to 2006.
  2006 Compared to 2005.
  Spectra
    Energy Partners Adjusted EBITDA and Cash Available for
    Distribution
  Adjusted
    EBITDA
   43




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##### Table of Contents




    the financial performance of Spectra Energy Partners
    assets without regard to financing methods, capital structure or
    historical cost basis;
    the ability of Spectra Energy Partners assets to generate
    cash sufficient to pay interest on indebtedness and to make
    distributions to partners; and
    Spectra Energy Partners operating performance and return
    on invested capital as compared to those of other publicly
    traded limited partnerships that own energy infrastructure
    assets, without regard to their financing methods and capital
    structure.    Cash
    Available for Distribution
           44




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##### Table of Contents



Spectra Energy Partners  Calculation
    and Reconciliation of Non-GAAP Adjusted EBITDA and
    Cash Available for Distribution
  Increase





Increase2007


2006


(Decrease)


2005


(Decrease)(In millions)Net income

$
197.5


$
61.6


$
135.9


$
57.0


$
4.6Add:Interest expense


17.1



8.2



8.9



8.5



(0.3
)Income tax expense (benefit)


(99.1
)


10.7



(109.8
)


7.8



2.9Depreciation and amortization


23.2



19.0



4.2



23.6



(4.6
)Less:Equity in earnings of Gulfstream


23.5



16.8



6.7



16.6



0.2Equity in earnings of Market Hub


32.1



24.3



7.8



29.7



(5.4
)Interest income


5.5







5.5







Other income, net


0.3



1.8



(1.5
)


0.5



1.3Adjusted EBITDA


77.3



56.6



20.7



50.1



6.5Add:Cash Available for Distribution from Gulfstream


28.9



23.8



5.1



25.5



(1.7
)Cash Available for Distribution from Market Hub


31.9



19.5



12.4



18.7



0.8Less:Cash paid for interest expense, net


10.3



8.6



1.7



8.6



Maintenance capital expenditures


10.1



10.9



(0.8
)


8.2



2.7Cash Available for Distribution

$
117.7


$
80.4


$
37.3


$
77.5


$
2.9  45




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##### Table of Contents



Spectra Energy Partners  Reconciliation of Non-GAAP Adjusted
    EBITDA and Cash Available for Distribution
  Increase





Increase2007


2006


(Decrease)


2005


(Decrease)(In millions)Net cash provided by operating activities

$
72.4


$
62.3


$
10.1


$
93.3


$
(31.0
)Interest income


(5.5
)






(5.5
)






Interest expense


17.1



8.2



8.9



8.5



(0.3
)Income tax expense  current


5.6



(2.1
)


7.7



3.5



(5.6
)Distributions received from Gulfstream


(16.8
)


(20.3
)


3.5



(29.7
)


9.4Distributions received from Market Hub


(5.9
)






(5.9
)






Changes in working capital and other


10.4



8.5



1.9



(25.5
)


34.0Adjusted EBITDA


77.3



56.6



20.7



50.1



6.5Add:Cash Available for Distribution from Gulfstream


28.9



23.8



5.1



25.5



(1.7
)Cash Available for Distribution from Market Hub


31.9



19.5



12.4



18.7



0.8Less:Cash paid for interest expense, net


10.3



8.6



1.7



8.6



Maintenance capital expenditures


10.1



10.9



(0.8
)


8.2



2.7Cash Available for Distribution

$
117.7


$
80.4


$
37.3


$
77.5


$
2.9   Gulfstream  Calculation and
    Reconciliation of Non-GAAP Adjusted EBITDA and
    Cash Available for Distribution
  Increase





Increase2007


2006


(Decrease)


2005


(Decrease)(In millions)Net income

$
95.4


$
68.4


$
27.0


$
67.8


$
0.6Add:Interest expense


47.9



48.8



(0.9
)


25.5



23.3Depreciation and amortization


30.0



30.4



(0.4
)


29.2



1.2Less:Other income, net


3.9



0.4



3.5



1.8



(1.4
)Adjusted EBITDA  100%


169.4



147.2



22.2



120.7



26.5Less:Cash paid for interest expense, net


49.9



49.5



0.4



15.8



33.7Maintenance capital expenditures


1.4



0.6



0.8



0.9



(0.3
)Cash Available for Distribution  100%

$
118.1


$
97.1


$
21.0


$
104.0


$
(6.9
)Adjusted EBITDA  24.5%

$
41.5


$
36.1


$
5.4


$
29.6


$
6.5Cash Available for Distribution  24.5%


28.9



23.8



5.1



25.5



(1.7
)  46




---



##### Table of Contents



Market Hub  Calculation and
    Reconciliation of Non-GAAP Adjusted EBITDA and Cash
    Available for Distribution
  Increase





Increase2007


2006


(Decrease)


2005


(Decrease)(In millions)Net income

$
64.2


$
48.7


$
15.5


$
59.4


$
(10.7
)Add:Interest expense


3.6



2.6



1.0







2.6Income tax expense


0.1







0.1







Depreciation and amortization


9.1



7.8



1.3



6.9



0.9Less:Interest income


2.2







2.2







Other income, net


7.1



10.6



(3.5
)


1.2



9.4Adjusted EBITDA  100%


67.7



48.5



19.2



65.1



(16.6
)Less:Maintenance capital expenditures


4.0



9.6



(5.6
)


27.6



(18.0
)Cash Available for Distribution  100%

$
63.7


$
38.9


$
24.8


$
37.5


$
1.4Adjusted EBITDA  50%

$
33.9


$
24.3


$
9.6


$
32.6


$
(8.3
)Cash Available for Distribution  50%


31.9



19.5



12.4



18.8



0.7   CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
      Regulatory
    Accounting
   47




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##### Table of Contents



Impairment
    of Goodwill
    Equity
    Method Investments
    Revenue
    Recognition
    LIQUIDITY
    AND CAPITAL RESOURCES
  Known
    Trends and Uncertainties
        Operating
    Cash Flows
   48




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##### Table of Contents




    a $9.4 million decrease in distributions from
    Gulfstream, and
    tax payments of $3.3 million in 2006 as compared to net tax
    refunds and accruals in 2005 of $13.6 million.  Investing
    Cash Flows
    
    net purchases of investment-grade securities totaling
    $154.6 million that are held as collateral for the term
    portion of the $500.0 million credit facility, and
    a $28.3 million increase in investment expenditures from
    infusions of capital to Gulfstream and Market Hub in 2007,
    partially offset by
    a $58.9 million reduction in expansion capital expenditures
    in 2007, primarily the result of the completion of the Jewell
    Ridge expansion project in 2006.          
    East Tennessee  Glade Spring/CNX is an add-on
    expansion from the Jewell Ridge project. This project is
    expected to go into service in the fourth quarter of 2008.
    Gulfstream  Phase III, expected to begin service in
    August 2008, includes approximately 35 miles of
    30-inch
    pipeline. Phase IV includes about 18 miles of
    20-inch pipe
    and increased compression and is expected to be in service in
    September 2008. Both projects will be serving the growing
    electricity needs of peninsular Florida by increasing
    Gulfstreams total capacity to 1.25 Bcf/d.
    Egan  Completion of the Cavern #4 expansion and
    beginning construction of Cavern #3, as well as
    improvements to Egans header system. Initial in-service of
    Cavern #3 and completion of header improvements are
    expected in the summer of 2009, with expected final working
    capacity of 8 Bcf in service in 2011. The additional
    capacity will enable Egan to capture opportunities around LNG
    supply along the Gulf Coast.
    Moss Bluff  In March 2008, Moss Bluff announced the
    addition of a fourth storage cavern, increasing storage working
    capacity by 6.5 Bcf, and expanding the pipeline
    interconnects. Construction is expected to begin in mid-2008,
    with the cavern expected to be fully in service in 2011.  P-25 P-25 72-mile,
 49




---



##### Table of Contents




    a distribution of $152.1 million, which was a return of
    capital from Gulfstream in 2005 associated with project
    financing obtained by Gulfstream, and
    an increase in cash used of approximately $26.6 million for
    capital expenditures primarily related to the Jewell Ridge
    Lateral expansion project of East Tennessee.  Financing
    Cash Flows
    
    $300.0 million in issuances of long-term debt and note
    payable to affiliates, net of redemptions in 2007, and
    $230.2 million of net cash received upon issuance of common
    units to the public in the IPO, partially offset by
    an initial cash distribution of $345.0 million to Spectra
    Energy on July 2, 2007 compared to net transfers from
    Spectra Energy of $23.6 million in 2006, and
    distributions to partners of $20.3 million in 2007, and
    dividends by East Tennessee to parent of $12.5 million in
    2007, prior to the IPO transaction.    
    a distribution in 2005 to Spectra Energy of the
    $152.1 million debt proceeds distributed to Spectra Energy
    Partners by Gulfstream, and
    a decrease in other cash distributed to Spectra Energy of
    $57.6 million as a result of higher capital expenditures
    and lower operating cash flow.  Credit Facility.
  Cash Distributions.
 50




---



##### Table of Contents



Off
    Balance Sheet Arrangements
      Contractual
    Obligations
    Contractual
    Obligations as of December 31, 2007
  Payments Due by Period2009 &


2011 &


2013 &Total


2008


2010


2012


Beyond(In millions)Long-term debt(a)

$
514.4


$
24.8


$
49.5


$
440.1


$
Notes payable  affiliates


50.0



50.0











Operating leases


0.3



0.1



0.2







Purchase obligationsMaterial/capital purchases


3.3



3.3











Other purchase obligations


0.7



0.7











Total contractual cash obligations

$
568.7


$
78.9


$
49.7


$
440.1


$
     (a)
    
    See Note 10 of Notes to Consolidated Financial Statements.
    Amounts include scheduled interest payments over the life of the
    debt.  Quantitative
    and Qualitative Disclosures About Market Risk
    Interest
    Rate Risk
    Credit
    Risk
  park-and-loan
 51




---



##### Table of Contents



OTHER
    ISSUES
  Global Climate Change.
  2008-2012
     52




---



##### Table of Contents



New
    Accounting Pronouncements
    SFAS No. 157, Fair Value
    Measurements.
  SFAS No. 159, The Fair Value Option for
    Financial Assets and Financial
    Liabilities.
  SFAS No. 141R, Business
    Combinations.
  SFAS No. 160, Noncontrolling Interest in
    Consolidated Financial Statements.
  Emerging Issues Task Force
    (EITF) 07-01
    Accounting for Collaborative
    Arrangements. EITF 07-01 EITF 07-01 EITF 07-01,
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.   53




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data.  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
            
     54




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##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Years Ended December 31,2007


2006


2005(In millions, except per-unit amounts)Operating RevenuesTransportation of natural gas

$
98.2


$
80.6


$
77.7Storage of liquefied natural gas and other


1.9



2.0



2.3Total operating revenues


100.1



82.6



80.0Operating ExpensesOperating, maintenance and other


15.7



9.0



16.7Operating, maintenance and other  affiliates


4.3



12.8



7.9Depreciation and amortization


23.2



19.0



23.6Property and other taxes


2.8



4.2



5.3Total operating expenses


46.0



45.0



53.5Operating Income


54.1



37.6



26.5Other Income and ExpensesEquity in earnings of unconsolidated affiliates


55.6



41.1



46.3Other income and expenses, net


0.3



1.8



0.5Total other income and expenses


55.9



42.9



46.8Interest Income


5.5







Interest Expense


17.1



8.2



8.5Earnings Before Income Taxes


98.4



72.3



64.8Income Tax Expense (Benefit)


(99.1
)(a)


10.7



7.8Net Income

$
197.5


$
61.6


$
57.0Calculation of Limited Partners Interest in Net
    Income:Net income(b)

$
46.2



n/a
(c)


n/a
(c)Less general partners interest in net income


0.9



n/a



n/aLimited partners interest in net income

$
45.3



n/a



n/aBasic and diluted net income per limited partner unit

$
0.68



n/a



n/aWeighted average limited partners units outstanding 
    basic and diluted


66.2



n/a



n/a     (a)
    
    Includes a $110.5 million benefit related to the
    elimination of accumulated deferred income tax liabilities. See
    Note 1 for further discussion.(b)
    
    Reflective of general and limited partners interest in Net
    Income since the closing of Spectra Energy Partners
    initial public offering on July 2, 2007.(c)
    
    Not applicable.   55




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##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2007


2006(In millions)ASSETSCurrent AssetsCash and cash equivalents

$
14.9


$
Receivables, trade (net of allowance for doubtful accounts of
    $0.1 at December 31, 2007 and $0.2 at December 31,
    2006)


9.9



9.1Receivables  affiliates


1.9



Natural gas imbalance receivables


0.8



3.1Natural gas imbalance receivables  affiliates


3.9



4.6Taxes receivable  affiliates






1.5Inventory


2.6



2.5Fuel tracker


2.4



Total current assets


36.4



20.8Investments and Other AssetsInvestments in unconsolidated affiliates


495.1



442.8Goodwill


118.3



118.3Other investments


154.8



Total investments and other assets


768.2



561.1Property, Plant and EquipmentCost


821.4



800.0Less accumulated depreciation and amortization


128.8



108.2Net property, plant and equipment


692.6



691.8Regulatory Assets and Deferred Debits


10.4



10.9Total Assets

$
1,507.6


$
1,284.6LIABILITIES AND PARTNERS CAPITAL / PARENT NET EQUITYCurrent LiabilitiesAccounts payable

$
6.1


$
0.1Accounts payable  affiliates


0.9



2.1Taxes accrued


2.9



3.4Taxes accrued  affiliates






3.4Interest accrued


1.6



0.4Natural gas imbalance payables


0.8



1.1Natural gas imbalance payables  affiliates


3.2



3.4Note payable  affiliates


50.0



Other


5.8



11.7Total current liabilities


71.3



25.6Long-term Debt


400.0



150.0Deferred Credits and Other LiabilitiesDeferred income taxes


8.4



113.0Other


2.6



6.9Total deferred credits and other liabilities


11.0



119.9Commitments and ContingenciesPartners Capital / Parent Net EquityCommon units (44.6 million units issued and
    outstanding at December 31, 2007)


699.3



Subordinated units (21.6 million units issued and
    outstanding at December 31, 2007)


303.5



General partner units (1.4 million units issued and
    outstanding at December 31, 2007)


19.0



Parent net investment






985.3Accumulated other comprehensive income


3.5



3.8Total partners capital / parent net equity


1,025.3



989.1Total Liabilities and Partners Capital / Parent Net
    Equity

$
1,507.6


$
1,284.6   56




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##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Years Ended December 31,2007


2006


2005(In millions)CASH FLOWS FROM OPERATING ACTIVITIESNet income

$
197.5


$
61.6


$
57.0Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


23.2



19.0



23.6Deferred income taxes


(104.6
)


12.8



4.4Equity in earnings of unconsolidated affiliates


(55.6
)


(41.1
)


(46.3
)Distributions from unconsolidated affiliates


22.7



20.3



29.7Decrease (increase) in:Receivables


(15.3
)


0.1



0.9Taxes receivable  affiliates


1.5







6.1Other current assets






(0.9
)


0.1Increase (decrease) in:Accounts payable


7.9



(0.8
)


1.7Taxes accrued


3.2



(3.3
)


7.5Other current liabilities


(4.7
)


(8.9
)


1.6Other, assets


0.9



(9.5
)


(0.5
)Other, liabilities


(4.3
)


13.0



7.5Net cash provided by operating activities


72.4



62.3



93.3CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures


(27.0
)


(85.9
)


(59.3
)Investment expenditures


(28.3
)






Purchases of available-for-sale securities


(1,439.0
)






Proceeds from sales and maturities of available-for-sale
    securities


1,284.4







Distributions from unconsolidated affiliates










152.1Net cash provided by (used in) investing activities


(209.9
)


(85.9
)


92.8CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issuance of long-term debt


380.0







Payments for the redemption of long-term debt


(130.0
)






Proceeds from note payable  affiliates


50.0







Proceeds from issuance of common units


230.2







Dividends to parent


(12.5
)






Distributions to partners


(20.3
)






Transfers from (to) parent, net


(345.0
)


23.6



(186.1
)Net cash provided by (used in) financing activities


152.4



23.6



(186.1
)Net increase in cash and cash equivalents


14.9







Cash and cash equivalents at beginning of the period










Cash and cash equivalents at end of the period

$
14.9


$



$
Supplemental DisclosuresCash paid for interest, net of amount capitalized

$
15.4


$
8.6


$
8.6Cash paid (received) for income taxes


6.3



1.1



(5.5
)    57




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##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  CONSOLIDATED
    STATEMENTS OF PARTNERS CAPITAL/PARENT NET
 EQUITY
    AND COMPREHENSIVE INCOME
  AccumulatedPartners Capital


OtherParent Net


Limited Partners


General


ComprehensiveInvestment


Common


Subordinated


Partner


Income


Total(In millions)December 31, 2004

$
1,024.7


$



$



$



$



$
1,024.7Net income


57.0



















57.0Other comprehensive income
    Net unrealized gains on cash flow hedges


















4.2



4.2Reclassification of cash flow hedges into earnings


















(0.1
)


(0.1
)Total comprehensive income






















61.1Net transfers to parent


(190.1
)


















(190.1
)December 31, 2005


891.6















4.1



895.7Net income


61.6



















61.6Other comprehensive income Reclassification of cash flow hedges
    into earnings


















(0.3
)


(0.3
)Total comprehensive income






















61.3Net transfers from parent


32.1



















32.1December 31, 2006


985.3















3.8



989.1Net income attributable to the period January 1, 2007
    through July 2, 2007


151.3



















151.3Net income attributable to the period July 3, 2007 through
    December 31, 2007






30.5



14.8



0.9







46.2Other comprehensive income Reclassification of cash flow hedges
    into earnings


















(0.3
)


(0.3
)Total comprehensive income






















197.2Dividends to parent


(12.5
)


















(12.5
)Distributions to partners






(13.4
)


(6.5
)


(0.4
)






(20.3
)Transfers to parent


(358.4
)


















(358.4
)Conversion to Spectra Energy
    Partners, LP


(765.7
)


452.0



295.2



18.5







Issuance of common units






230.2















230.2December 31, 2007

$



$
699.3


$
303.5


$
19.0


$
3.5


$
1,025.3    58




---



##### 



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial Statements
  INDEX
   
 Page1.


Summary of Operations and Significant Accounting
    Policies


592.


Transactions with Affiliates


653.


Business Segments


664.


Regulatory Matters


675.


Income Taxes


686.


Net Income per Limited Partner Unit and Cash
    Distributions


697.


Marketable Securities


718.


Investments in Unconsolidated Affiliates


719.


Property, Plant and Equipment


7310.


Debt and Credit Facility


7311.


Deferred Revenues


7412.


Commitments and Contingencies


7413.


Interest Rate Risk, Credit Risk and Financial
    Instruments


7514.


Equity-Based Compensation


7615.


Subsequent Event


7616.


Quarterly Financial Data (Unaudited)


76    1.
    Summary
    of Operations and Significant Accounting Policies  Nature of Operations.
  Initial Public Offering.
    Basis of Presentation.
 59




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
            Use of Estimates.
  Cash and Cash Equivalents.
  Inventory.
  Natural Gas Imbalances.
 60




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Investments.
  Goodwill.
      Property, Plant and Equipment.
 61




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Unamortized Debt Expense.
  Environmental Expenditures.
  Cost-Based Regulation.
  Revenue Recognition.
  Significant Customers.
  % of RevenuesCustomer

2007


2006


2005Atmos Energy Corporation


13
%


18
%


16
%CNX Gas Company LLC


11



(a
)


(a
)KGEN Murray I and II, LLC


11



13



14Knoxville Utilities Board


(a
)


(a
)


10     (a)
    
    Percentage less than 10% 62




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##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
   Allowance for Funds Used During Construction
    (AFUDC).
  Preliminary Project Costs.
  Income Taxes.
        Segment Reporting.
 63




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Distributions from Unconsolidated
    Affiliates.
  Cash Flow Hedges. Capital/Parent
  New Accounting Pronouncements 
    2007.
    accrue-in-advance
  New Accounting
    Pronouncement  2006.
    New Accounting Pronouncements 
    Pending.
   64




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
          (EITF) 07-01, EITF 07-01 EITF 07-01 EITF 07-01,
  2.
    Transactions
    with Affiliates     65




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Consolidated
    Statement of Operations
  2007


2006


2005(In millions)Transportation of natural gas

$



$



$
0.2Operating, maintenance and other expenses


4.3



12.8



7.9Interest expense


0.6







   Consolidated
    Balance Sheets
  December 31,2007


2006(In millions)Receivables

$
1.9


$
Natural gas imbalance receivables


3.9



4.6Taxes receivable






1.5Accounts payable


0.9



2.1Taxes accrued






3.4Natural gas imbalance payables


3.2



3.4Note payable


50.0



     10-inch
    3.
    Business
    Segments       66




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
        Business
    Segment Data
  Segment EBIT/Consolidated





Capital and


Segment/Total


Earnings Before


Depreciation and


Investment


TotalRevenues


Income Taxes


Amortization


Expenditures


Assets(In millions)2007East Tennessee

$
100.1


$
57.6


$
23.2


$
27.0


$
864.4Other






52.4







28.3



643.2Total


100.1



110.0



23.2



55.3



1,507.6Interest income






5.5











Interest expense






17.1











Total consolidated

$
100.1


$
98.4


$
23.2


$
55.3


$
1,507.62006East Tennessee

$
82.6


$
42.1


$
19.0


$
85.9


$
841.8Other






38.4











442.8Total


82.6



80.5



19.0



85.9



1,284.6Interest expense






8.2











Total consolidated

$
82.6


$
72.3


$
19.0


$
85.9


$
1,284.62005East Tennessee

$
80.0


$
28.7


$
23.6


$
59.3Other






44.6







Total


80.0



73.3



23.6



59.3Interest expense






8.5







Total consolidated

$
80.0


$
64.8


$
23.6


$
59.3   4.
    Regulatory
    Matters  Regulatory Assets.
  67




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
  December 31,


Recovery/Refund2007


2006


Period Ends(In millions)Regulatory Assets(1)Regulatory asset related to income taxes

$
8.4


$
8.5


(2)Vacation accrual (non-current)


1.1



2.0


2008Total Regulatory Assets

$
9.5


$
10.5     (1)
    
    Included in Regulatory Assets and Deferred Debits on the
    Consolidated Balance Sheets.(2)
    
    Amortized over the life of the related property, plant and
    equipment.    Rate
    Related Information
  East Tennessee.
  Gulfstream.
    5.
    Income
    Taxes    2007


2006


2005(In millions)Current income taxesFederal(a)

$
5.0


$
(1.6
)

$
3.2State


0.5



(0.5
)


0.2Total current income taxes


5.5



(2.1
)


3.4Deferred income taxesFederal(b)


(106.2
)


11.5



3.1State


1.6



1.3



1.3Total deferred income taxes


(104.6
)


12.8



4.4Total income tax expense (benefit)

$
(99.1
)

$
10.7


$
7.8     (a)
    Includes federal income taxes prior to the formation of the
    master limited partnership.  (b)
    Comprised of the $110.5 million of accumulated deferred
    income tax liabilities as discussed in Note 1 and federal
    income tax effects prior to the formation of the master limited
    partnership. 68




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
   Reconciliation
    of Income Tax Expense at the U.S. Federal Statutory Tax Rate to
    Actual Tax Expense (Benefit)
  2007


2006


2005(In millions)Income tax expense, computed at the statutory rate of 35%

$
34.4


$
25.3


$
22.7State income tax, net of federal income tax effect(a)


1.6



0.6



1.0Entities not subject to income tax


(24.6
)


(14.4
)


(16.2
)Change in tax status


(110.5
)






Other items, net






(0.8
)


0.3Total income tax expense (benefit)

$
(99.1
)

$
10.7


$
7.8Effective tax rate


(b
)


14.8
%


12.1
%     (a)
    Includes federal income tax effects prior to the formation of
    the master limited partnership.  (b)
    Not meaningful.  Net
    Deferred Income Tax Liability Components
  December 31,2007


2006(In millions)Deferred credits and other liabilities

$



$
3.4Net deferred income tax assets






3.4Accelerated depreciation rates






(112.1
)State deferred income tax, net of federal tax effect


(8.4
)


(4.3
)Total net deferred income tax liabilities


(8.4
)


(116.4
)Total net deferred income tax liabilities

$
(8.4
)

$
(113.0
)       6.
    Net
    Income Per Limited Partner Unit and Cash Distributions  No. 03-6,
   69




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Six Months EndedDecember 31,2007(In millions, exceptper-unit amounts)Net income (post-close of the IPO)

$
46.2Less general partners interest in net income


0.9Limited partners interest in net income

$
45.3Net income allocable to common units

$
30.5Net income allocable to subordinated units


14.8Limited partners interest in net income

$
45.3Weighted average limited partner units outstanding 
    basic and dilutedCommon units


44.6Subordinated units


21.6Total


66.2Net income per limited partner unit  basic and dilutedCommon units

$
0.68Subordinated units

$
0.68       Available Cash.
  
    less the amount of cash reserves established by the general
    partner to:  
    provide for the proper conduct of business,
    comply with applicable law, any debt instrument or other
    agreement, or
    provide funds for distributions to the unitholders and to the
    general partner for any one or more of the next four quarters,  
    plus, if the general partner so determines, all or a portion of
    cash on hand on the date of determination of Available Cash for
    the quarter.  Subordinated Units.
 70




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Incentive Distribution Rights.
  Total Quarterly

Marginal PercentageDistribution

Interest in DistributionsCommon andSubordinatedTarget Amount

Unitholders


General PartnerMinimum Quarterly Distribution

$0.30


98
%


2
%First Target Distribution

up to $0.345


98
%


2
%Second Target Distribution

above $0.345 up to $0.375


85
%


15
%Third Target Distribution

above $0.375 up to $0.45


75
%


25
%Thereafter

above $0.45


50
%


50
%     7.
    Marketable
    Securities      December 31, 2007Gross


GrossUnrealized


Unrealized


EstimatedHolding


Holding


FairGains


Losses


Value(In millions)Corporate debt securities

$



$



$
125.2Other










29.4Total long-term investments

$



$



$
154.6     8.
    Investments
    in Unconsolidated Affiliates   71




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
          Investments
    in Unconsolidated Affiliates
  December 31,2007


2006(In millions)Gulfstream

$
211.3


$
186.4Market Hub


283.8



256.4Total

$
495.1


$
442.8   Equity
    in Earnings of Unconsolidated Affiliates
  2007


2006


2005(In millions)Gulfstream

$
23.5


$
16.8


$
16.6Market Hub


32.1



24.3



29.7Total

$
55.6


$
41.1


$
46.3   Summarized
    Financial Information of Unconsolidated Affiliates
  2007


2006


2005Market








Market








MarketGulfstream


Hub


Total


Gulfstream


Hub


Total


Gulfstream


Hub


Total(In millions)Statements of OperationsOperating revenues

$
185.3


$
91.3


$
276.6


$
180.3


$
78.8


$
259.1


$
145.1


$
78.0


$
223.1Operating expenses


45.9



32.7



78.6



63.5



38.1



101.6



53.6



19.8



73.4Operating income


139.4



65.6



205.0



116.9



51.3



168.2



91.5



59.4



150.9Net income


95.4



64.2



159.6



68.4



48.7



117.1



67.8



59.4



127.2   72




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
  December 31, 2007


December 31, 2006Gulfstream


Market Hub


Total


Gulfstream


Market Hub


Total(In millions)Balance SheetsCurrent assets

$
96.0


$
157.8


$
253.8


$
46.7


$
58.2


$
104.9Non-current assets


1,669.1



539.1



2,208.2



1,625.8



603.0



2,228.8Current liabilities


(30.9
)


(127.7
)


(158.6
)


(34.7
)


(120.3
)


(155.0
)Non-current liabilities


(849.7
)


(1.1
)


(850.8
)


(855.7
)


(25.0
)


(880.7
)Net assets

$
884.5


$
568.1


$
1,452.6


$
782.1


$
515.9


$
1,298.0   9.
    Property,
    Plant and Equipment  Estimated


December 31,Useful Life


2007


2006(Years)


(In millions)Natural gas transmission


50


$
786.5


$
757.3Equipment


3-10



3.5



3.4Vehicles


3-5



2.3



2.4Land






1.1



1.1Construction in process






6.0



12.3Other


5-33



22.0



23.5Total property, plant and equipment






821.4



800.0Total accumulated depreciation






(128.8
)


(108.2
)Total net property, plant and equipment





$
692.6


$
691.8     10.
    Debt
    and Credit Facility  Credit


Outstanding as of December 31, 2007Expiration


Facility





RevolvingCredit Facility Summary

Date


Capacity


Term Loan


Loan


Total(In millions)Spectra Energy Partners, LP


2012


$
500.0


$
153.0


$
97.0


$
250.0      73




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
        11.
    Deferred
    Revenues    12.
    Commitments
    and Contingencies  General Insurance.
  Environmental.
 74




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Litigation.
  Leases.
  13.
    Interest
    Rate Risk, Credit Risk and Financial Instruments  Interest Rate Risk. variable-rate
  Credit Risk.
  Financial Instruments.
  December 31,2007


2006Approximate





ApproximateBook Value


Fair Value


Book Value


Fair Value(In millions)Long-term debt(a)

$
450.0


$
451.0


$
150.0


$
150.1Long-term SFAS 115 securities


154.6



154.6







     (a)
    
    Includes current maturities.   75




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##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  Notes to
    Consolidated Financial
    Statements  (Continued)
  14.
    Equity-Based
    Compensation        15.
    Subsequent
    Event   16.  Quarterly
    Financial Data (Unaudited)  First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter


Total(In millions, except per-unit amounts)2007Operating revenues

$
26.4


$
23.7


$
23.8


$
26.2


$
100.1Operating income


14.7



17.7



9.0



12.7



54.1Net income


19.2



21.6



134.3



22.4



197.5Net income per limited partner unit


n/a



n/a


$
0.35


$
0.33


$
0.682006Operating revenues

$
22.2


$
18.4


$
18.6


$
23.4


$
82.6Operating income


5.4



18.6



6.1



7.5



37.6Net income


9.5



21.8



13.6



16.7



61.6    76




---



##### Table of Contents



SPECTRA
    ENERGY PARTNERS, LP
  SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
  Additions:Balance at





Charged to





Balance atBeginning


Charged to


Other





End ofof Period


Expense


Accounts


Deductions(a)


Period(In millions)December 31, 2007:Allowance for doubtful accounts

$
0.2


$



$



$
0.1


$
0.1Other(b)


5.0











3.3



1.7$
5.2


$



$



$
3.4


$
1.8December 31, 2006:Allowance for doubtful accounts

$
0.3


$



$



$
0.1


$
0.2Other(b)


7.5











2.5



5.0$
7.8


$



$



$
2.6


$
5.2December 31, 2005:Allowance for doubtful accounts

$
0.2


$
0.2


$



$
0.1


$
0.3Other(b)


20.0







12.0



24.5



7.5$
20.2


$
0.2


$
12.0


$
24.6


$
7.8     (a)
    
    Principally cash payments.(b)
    
    Principally a right of way dispute, included in Accounts Payable
    on the Consolidated Balance Sheets at December 31, 2007 and
    Other Current Liabilities at December 31, 2006 and 2005. 77




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.    Rule 13a-15(e) 15d-15(e)
  Changes
    in Internal Control over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
  Managements
    Annual Report on Internal Control over Financial
    Reporting
    Item 9B.
    Other
    Information.   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance.  Management
    of Spectra Energy Partners, LP
   78




---



##### Table of Contents



Board of
    Directors and Officers
          Meeting
    Attendance and Preparation
    Directors
    and Executive Officers
    Name

Age

Position with Spectra Energy Partners GP, LLCMartha B. Wyrsch


50


Chairman of the BoardC. Gregory Harper


43


President, Chief Executive Officer and DirectorLon C. Mitchell, Jr.


55


Vice President and Chief Financial OfficerSteven D. Arnold


47


DirectorStewart A. Bliss


74


DirectorNora M. Brownell


61


DirectorWilliam S. Garner, Jr.


58


DirectorGregory J. Rizzo


51


Director    79




---



##### Table of Contents



Denver-based
       80




---



##### Table of Contents



Section 16(a)
    Beneficial Ownership Reporting Compliance
    Audit
    Committee
        Conflicts
    Committee
    Principles
    for Corporate Governance and Code of Business Ethics
   81




---



##### Table of Contents



www.spectraenergypartners.com. (713) 627-4963.
  Communications
    by Unitholders
  c/o President,
  Report of
    the Audit Committee
    
    reviewed and discussed the audited financial statements in this
    annual report on
    Form 10-K
    with management, including a discussion of the quality, not just
    the acceptability, of the accounting principles, the
    reasonableness of significant judgments and the clarity of
    disclosures in the financial statements;
    reviewed with Deloitte & Touche, LLP, Spectra Energy
    Partners independent auditors, who are responsible for
    expressing an opinion on the conformity of the audited financial
    statements with generally accepted accounting principles, their
    judgments as to the quality and acceptability of Spectra Energy
    Partners accounting principles and such other matters as
    are required to be discussed with the Audit Committee under
    generally accepted auditing standards;
    received the written disclosures and the letter required by
    standard No. 1 of the independence standards board
    (independence discussions with audit committees) provided to the
    audit committee by Deloitte & Touche, LLP;
    discussed with Deloitte & Touche, LLP its independence
    from management and Spectra Energy Partners and considered the
    compatibility of the provision of nonaudit service by the
    independent auditors with the auditors independence;
    discussed with Deloitte & Touche, LLP the matters
    required to be discussed by Statement on Auditing Standards
    No. 61 (communications with audit committees);
    discussed with Spectra Energys internal auditors and
    Deloitte & Touche, LLP the overall scope and plans for
    their respective audits. The Audit Committee meets with the
    internal auditors and Deloitte & Touche, LLP, with and
    without management present, to discuss the results of their
    examinations, their evaluations of Spectra Energy Partners
    internal controls and the overall quality of Spectra Energy
    Partners financial reporting;
    based on the foregoing reviews and discussions, recommended to
    the Board of Directors that the audited financial statements be
    included in the annual report on
    Form 10-K
    for the year ended December 31, 2007, for filing with the
    SEC; and
    approved the selection and appointment of Deloitte &
    Touche, LLP to serve as Spectra Energy Partners
    independent auditors. 82




---



##### Table of Contents



Audit Committee
         Item 11.
    Executive
    Compensation.  COMPENSATION
    DISCUSSION AND ANALYSIS
         83




---



##### Table of Contents



Committee
    Advisors
      Objectives
    of the Compensation Program
     84




---



##### Table of Contents



2007 Pay
    Opportunity
  Short Term

Long Term

TotalIncentive

Incentive

PayName

Salary

Opportunity

Opportunity

OpportunityC. Gregory Harper

$
260,832


$
137,500


$
156,647


$
554,979Lon C. Mitchell

$
245,263


$
125,000


$
238,632


$
608,895   Elements
    of the Compensation Plan
    Component

Description

RationaleSalary

Compensation paid in cash throughout the year.

Provides compensation for ongoing service.Short-Term Incentive

Annual cash payment based on the achievement of predetermined
    financial and individual performance goals.

Rewards performance based on the achievement of objectives
    required to attain strategic goals.Long-Term Incentive

Stock options and phantom awards.

Rewards long-term performance, establishes economic alignment of
    executives with shareholders and provides retention incentive.Retirement

Retirement and savings plans.

Provides additional retention incentive through
    retirement-related payments.   Salary.
  Short-Term Incentives. and/or
    PercentageName

of SalaryC. Gregory Harper


50
%Lon C. Mitchell


50
%  85




---



##### Table of Contents



Target
    Incentive Payment Opportunity
  Measures

Weight


Threshold

Target

Maximum

ActualSpectra Energy EPS


20
%

50% ($1.25)

100% ($1.40)

200% ($1.60)

165% ($1.53)Spectra Energy Transmission EBITDA **


25
%

50% ($1,810.0)

100% ($1,847.0)

200% ($1,902.0)

200% ($2,005.8)Spectra Energy Transmission Return on Capital Employed


20
%

50%

100%

200%

200%EH&S and Cost Initiatives


15
%

50%

100%

200%

178.5%Individual


20
%

*

*

*

*     *
    
    The target individual goals for the named executive officers is
    discussed under  Determination of Short Term
    Incentive Payments.**
    
    Amounts shown in millions.    2007 STI
    Award Table
  Actual Payout as aActual Payout

Percent of TargetShort-Term

as a Percent of

Short-TermName

Incentive Award

Salary

Incentive AwardC. Gregory Harper

$
245,238



89
%


178
%Lon C. Mitchell

$
222,219



89
%


178
%   Determination
    of Short Term Incentive Payments
     86




---



##### Table of Contents



Objective

Mr. Harper


Mr. MitchellLeadership development, diversity and a high performance culture


10
%


Success in deploying growth strategy for Spectra Energy
    Partners, LP


20
%


20
%Achievement of strategic transactions including the initial
    public offering of Spectra Energy Partners, LP


35
%


35
%Finalize activities related to spin-off of Spectra Energy Corp
    from Duke Energy


35
%


Establish long term strategy for corporate insurance coverage






25
%Establish and implement corporate risk management process






20
%   Long-Term Incentives.
     87




---



##### Table of Contents



Expected Value ofLTI/Equity Grants

Number of

Number ofas a Percentage of

Options

PhantomName

Base Salary

Granted

Shares GrantedC. Gregory Harper


65
%


20,200



3,500Lon C. Mitchell


100
%


30,800



5,300     Retirement and Other Benefits.
          Severance.
 88




---



##### Table of Contents




    Agreements are only triggered if there is:  
    a
    change-in-control
    of Spectra Energy, and
    an involuntary termination of the executive following the
    change-in-control
    that is not a for cause termination by the company.
    (This feature is commonly called a double trigger.)  
    Cash severance benefits are limited to two times annual salary
    plus two times target bonus.
    Medical, dental and life insurance are continued during the two
    years following severance.
    Provides for a lump sum payment for company savings plan and
    pension plan contributions.
    No payment for
    gross-up of
    excise taxes.
    Executives are subject to certain non-competition and
    non-solicitation provisions.  Compensation
    of the Chief Executive Officer
    Factors
    Considered When Determining Total Compensation
  Group Comparison.
  Compensation
    Reference Group
  CenterPoint Energy

Dominion Resources

DTE EnergyEl Paso Corp.

Enbridge, Inc.

Equitable ResourcesNational Fuel Gas Co.

NiSource

ONEOK, Inc.Questar Corp.

Sempra Energy

Southern Union CompanyTransCanada Corp.

Williams Companies   ©
 89




---



##### Table of Contents



External Market Conditions and Individual
    Factors.
  2008
    Compensation Program
    Compensation
    Committee Report
  10-K 10-K.
      90




---



##### Table of Contents



EXECUTIVE
    COMPENSATION
    SUMMARY
    COMPENSATION TABLE
  Change inPensionValue andNon-Equity

NonqualifiedIncentive

DeferredStock

Option

Plan

Compensation

All OtherName and Principal



Salary

Bonus

Awards

Awards

Compensation

Earnings

Compensation

TotalPosition

Year

($)

($)

($)(1)

($)(2)

($)(3)

($)(4)

($)(5)

($)C. Gregory Harper


2007



260,832







252,194



78,623



245,238



51,970



30,500



919,357Chief Executive Officer, Spectra Energy PartnersLon C. Mitchell, Jr.(6)


2007



245,263



25,000



318,367



233,230



222,219



55,039



28,986



1,128,104Chief Financial Officer, Spectra Energy Partners     (1)
    
    This column reflects the aggregate dollar amount recognized for
    financial statement reporting purposes for 2007 with respect to
    outstanding performance share and phantom share awards, and
    includes amounts attributable to performance share and phantom
    share awards granted in prior years. The aggregate dollar amount
    was determined in accordance with the provisions of
    SFAS 123(R), but without regard to any estimate of
    forfeitures related to service-based vesting conditions. See
    Note 14 of the Consolidated Financial Statements for
    Spectra Energy Partners, LP regarding assumptions underlying the
    valuation of equity awards.(2)
    
    This column reflects the aggregate dollar amount recognized for
    financial statement reporting purposes for 2007 with respect to
    outstanding stock options, and includes amounts attributable to
    stock options granted in prior years. The aggregate dollar
    amount was determined in accordance with the provisions of
    SFAS 123(R). See Note 14 of the Consolidated Financial
    Statements for Spectra Energy Partners, LP regarding assumptions
    underlying the valuation of equity awards.(3)
    
    Non-Equity Incentive Plan Compensation column includes amounts
    payable under the Spectra STI Plan with respect to the 2007
    performance period. Unless deferred, these amounts were paid in
    March 2008.(4)
    
    Change in Pension Value and Nonqualified Deferred Compensation
    Earnings column includes the amounts listed below. During 2007,
    our pension plan measurement date was changed from
    September 30 to December 31. Therefore, figures for
    2007 represent the change in value during the fifteen month
    period ending December 31, 2007.  C. Gregory


Lon C.Harper


Mitchell, Jr.Change in Actuarial Present Value of Accumulated Benefit Under
    the Spectra Energy Retirement Cash Balance Plan for the Period
    Beginning on October 1, 2006 and Ending on
    December 31, 2007

$
25,095


$
24,453Change in Actuarial Present Value of Accumulated Benefit Under
    the Spectra Energy Executive Cash Balance Plan for the Period
    Beginning on October 1, 2006 and Ending on
    December 31, 2007


26,875



30,586Total

$
51,970


$
55,039  91




---



##### Table of Contents



(5)
    
    All Other Compensation column includes the following for 2007:  C. Gregory


Lon C.Harper


Mitchell, Jr.Matching Contributions Under the Spectra Energy Retirement
    Savings Plan

$
13,500


$
Premiums for Life Insurance Coverage Provided Under Life
    Insurance Plans


567



2,278Make-Whole Matching Contribution Credits Under the Spectra
    Energy Corp Executive Savings Plan


13,933



26,658Charitable contributions made in the name of the Executive under
    Spectra Energys matching gift policy


2,500



50Total

$
30,500


$
28,986   (6)
    
    Mr. Mitchell received a discretionary bonus equal to
    $25,000 in connection with his efforts relating to the spin-off
    of Spectra Energy from Duke Energy. 92




---



##### Table of Contents



2007
    GRANTS OF PLAN-BASED AWARDS
  All Other


All OtherStock


OptionAwards:


Awards:


ExerciseNumber of


Number of


or Base


Grant DateEstimated Possible Payouts Under


Shares of


Securities


Price of


Fair Value ofNon-Equity Incentive Plan Awards(1)


Stock or


Underlying


Option


Stock andGrant


Approval


Threshold


Target


Maximum


Units


Options


Awards


OptionName

Date


Date


($)


($)


($)


(#) (3)


(#)(3)


($/Sh)


Awards(#)(4)C. Gregory Harper









$
68,750


$
137,500


$
261,250C. Gregory Harper


2/27/2007



2/26/2007



















20,200



25.64


$
152,914C. Gregory Harper


2/27/2007



2/26/2007















3,500










$
89,740C. Gregory Harper(2)


7/2/2007



6/27/2007















10,000










$
283,000Lon C. Mitchell, Jr.









$
62,500


$
125,000


$
237,500Lon C. Mitchell, Jr.


2/27/2007



2/26/2007



















30,800



25.64


$
233,156Lon C. Mitchell, Jr.


2/27/2007



2/26/2007















5,300










$
135,892Lon C. Mitchell, Jr.(2)


7/2/2007



6/27/2007















7,500










$
212,250     (1)
    
    The awards reflected in the Estimated Possible Payouts Under
    Non-Equity Incentive Plan Awards column were granted for the
    2007 performance period under the terms of the Spectra STI Plan.
    The actual amounts paid to each executive under the terms of
    such plan for 2007 are disclosed in the Summary Compensation
    Table.(2)
    
    The Spectra Compensation Committee, at its meeting on
    May 9, 2007, recommended to the Spectra Energy Partners
    board a grant of Spectra Energy Partners phantom units in
    conjunction with the Initial Public Offering of Spectra Energy
    Partners to the Named Executive Officers. The Spectra Energy
    Partners board, at its meeting on June 27, 2007 approved
    these grants. These awards vest, subject to certain exceptions,
    in equal installments on the first three anniversaries of the
    date of grant.(3)
    
    Awards reflected in these columns with a grant date of
    February 27, 2007 were made in shares of Spectra Energy
    common stock and were granted under the terms of the Spectra
    Energy Corp 2007 Long-Term Incentive Plan. Awards reflected in
    these columns with a grant date of July 2, 2007 were made
    in units of Spectra Energy Partners and were granted under the
    terms of the Spectra Energy Partners 2007 Long-Term Incentive
    Plan. This table does not include grants of Spectra Energy
    shares that were distributed on January 2, 2007 under the
    terms of the spin-off. These awards are included in the
    Outstanding Equity Awards Table.(4)
    
    The per share full grant date fair value of the phantom shares
    and stock options granted on February 27, 2007, computed in
    accordance with FASB 123(R) is $25.64 and $7.57, respectively.
    The per share full grant date fair value of the phantom units
    granted on July 2, 2007, computed in accordance with FASB
    123(R) is $28.30.   93




---



##### Table of Contents



OUTSTANDING
    EQUITY AWARDS AT 2007 FISCAL YEAR-END
  Stock AwardsEquityIncentivePlanEquity


Awards:Incentive


Market orPlan


PayoutAwards:


Value ofNumber of


UnearnedOption Awards


Number of


Market


Unearned


Shares,Number of








Shares or


Value of


Shares,


Units orNumber of


Securities








Units


Shares or


Units or


OtherSecurities


Underlying








of Stock


Units of


Other


RightsUnderlying


Unexercised


Option





That


Stock That


Rights That


ThatUnexercised


Options


Exercise


Option


Have Not


Have Not


Have Not


Have NotOptions


(#) Unexercisable


Price


Expiration


Vested


Vested


Vested


VestedName

(#) Exercisable


(1)


($)(2)


Date


(#)(3)(4)


($)


(#)(5)


($)C. Gregory Harper(6)


SE



1,200






$
23.79



2/17/2008DUK



2,400






$
15.74



2/17/2008SE



1,400






$
25.53



2/17/2009DUK



2,800






$
16.90



2/17/2009SE



1,700






$
21.42



12/20/2009DUK



3,400






$
14.17



12/20/2009SE



2,100






$
36.86



12/20/2010DUK



4,200






$
24.39



12/20/2010SE



1,900






$
32.44



12/19/2011DUK



3,800






$
21.47



12/19/2011SE



500






$
33.00



1/17/2012DUK



1,000






$
21.84



1/17/2012SE



625






$
11.86



2/25/2013DUK



1,250






$
7.85



2/25/2013SE



850






$
12.52



4/1/2013DUK



1,700






$
8.29



4/1/2013SE







20,200


$
25.64



2/27/2017SE



8,092


$
208,935SEP



10,000



239,600DUK



9,184



185,241Total






$
633,776SE











679


$
17,519SEP















DUK











1,357



27,361Total














$
44,880   94




---



##### Table of Contents



Stock AwardsEquityIncentivePlanEquity


Awards:Incentive


Market orPlan


PayoutAwards:


Value ofNumber of


UnearnedOption Awards


Number of


Market


Unearned


Shares,Number of








Shares or


Value of


Shares,


Units orNumber of


Securities








Units


Shares or


Units or


OtherSecurities


Underlying








of Stock


Units of


Other


RightsUnderlying


Unexercised


Option





That


Stock That


Rights That


ThatUnexercised


Options


Exercise


Option


Have Not


Have Not


Have Not


Have NotOptions


(#) Unexercisable


Price


Expiration


Vested


Vested


Vested


VestedName

(#) Exercisable


(1)


($)(2)


Date


(#)(3)(4)


($)


(#)(5)


($)Lon C. Mitchell, Jr.(7)


SE



2,900






$
36.86



12/20/2010DUK



5,800






$
24.39



12/20/2010SE



6,150






$
32.44



12/19/2011DUK



12,300






$
21.47



12/19/2011SE



6,375






$
11.86



2/25/2013SE







30,800


$
25.64



2/27/2017SE



10,595


$
273,563SEP



7,500


$
179,700DUK



10,590


$
213,600Total






$
666,863SE











995


$
25,691SEP














$
DUK











1,990


$
40,138Total














$
65,829     (1)
    
    On February 27, 2007, Messrs. Harper and Mitchell
    received stock options that vest in three equal installments on
    the first three anniversaries of the date of grant.(2)
    
    For options granted February 27, 2007, the exercise price
    is equal to the closing price of Spectra Energy common stock on
    the date of grant. For options granted prior to
    December 31, 2006, the exercise price for the original Duke
    Energy options is equal to the closing price of Duke Energy
    common stock on the date of grant. In connection with the
    spin-off of Spectra Energy effective January 2, 2007 all
    Duke Energy equity awards were adjusted to reflect the change in
    the price of Duke Energy common stock that occurred as a result
    of the spin-off, and an additional award denominated in Spectra
    Energy common shares was granted. The adjustments preserved, but
    did not increase, the value of the equity awards. The following
    chart indicates the original and adjusted exercise prices of
    each Duke stock option. In addition, the chart indicates
    exercise prices for stock options granted on January 2,
    2007 at Spectra Energy associated to each grant date at Duke
    Energy:  Spectra EnergyOption ExerciseDuke Original

Duke Adjusted

Price GrantedOption Exercise

Option Exercise

on January 2,Date of Grant

Price

Price

2007February 17, 1998

$
27.63


$
15.74


$
23.79February 17, 1999

$
29.66


$
16.90


$
25.53December 20, 1999

$
24.88


$
14.17


$
21.42December 20, 2000

$
42.81


$
24.39


$
36.86December 19, 2001

$
37.68


$
21.47


$
32.44January 17, 2002

$
38.33


$
21.84


$
33.00February 25, 2003

$
13.77


$
7.85


$
11.86April 1, 2003

$
14.54


$
8.29


$
12.52  95




---



##### Table of Contents



(3)
    
    Messrs. Harper and Mitchell received Spectra Energy and
    Duke Energy phantom shares as follows:  a.
    On February 27, 2007, Spectra Energy shares were granted
    which, subject to certain exceptions, vest on the third
    anniversary of the date of grant.b.
    On February 28, 2005 and April 4, 2006, Duke Energy
    shares were granted which, subject to certain exceptions, vest
    in equal installments on the first five anniversaries of the
    date of grant. Outstanding Duke Energy shares and corresponding
    Spectra Energy shares related to this award are included above.  (4)
    
    Messrs. Harper and Mitchell received Spectra Energy
    Partners phantom shares on July 2, 2007 each of which,
    subject to certain exceptions, vest in three equal installments
    on the first three anniversaries of the date of grant.(5)
    
    Messrs. Harper and Mitchell received performance shares on
    April 4, 2006 that, subject to certain exceptions, are
    eligible for vesting on December 31, 2008. Pursuant to
    Instruction 3 to Item 402(f)(2) of
    Regulation S-K,
    performance shares are listed at the threshold number of shares.(6)
    
    On February 1, 2005, Mr. Harper received a grant of
    5,000 restricted shares which vested on February 1, 2008.
    The outstanding Duke Energy shares and corresponding Spectra
    Energy shares related to this award are included above.(7)
    
    On April 1, 2005, Mr. Mitchell received a grant of
    5,000 phantom shares that, subject to certain exceptions, vest
    on the third anniversary of the date of grant. The outstanding
    Duke Energy shares and corresponding Spectra Energy shares
    related to this award are included above. 96




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##### Table of Contents



2007
    OPTION EXERCISES AND STOCK VESTED
  Option Awards


Stock AwardsNumber of


Value


Number ofShares


Realized on


Shares


ValueAcquired on


Exercise


Acquired


Realized onName

Exercise(#)


($)(1)


on Vesting(#)(2)


Vesting($)(3)C. Gregory HarperSpectra Energy





$




1,833


$
46,873Duke Energy










3,667



77,442Total





$







$
124,315Lon C. Mitchell, Jr.Spectra Energy





$




2,262


$
57,873Duke Energy


12,750



144,840



4,524



95,451Total





$
144,840






$
153,324     (1)
    
    The value realized upon exercise was calculated based on the
    closing price of a share of Spectra Energy or Duke Energy common
    stock on the date of option exercise.(2)
    
    Includes performance shares covering the 2005  2007
    performance period based on Duke Energys total shareholder
    return performance from January 1, 2005 
    December 31, 2006 and equally weighted between Duke Energy
    and Spectra Energys total shareholder performance from
    January 1, 2007  December 31, 2007.(3)
    
    The value realized upon vesting of stock awards was calculated
    based on the closing price of a share of common stock for the
    respective equity on the respective vesting date, and includes a
    cash payment to Messrs. Harper and Mitchell for dividend
    equivalents on earned performance shares in the amount of $9,296
    and $11,090, respectively.  Spectra
    Energy Retirement Cash Balance Plan and Executive Cash Balance
    Plan
        30-year
  Form W-2
 97




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##### Table of Contents



PENSION
    BENEFITS
  Number


Presentof Years


Value ofCredited


Accumulated


Payments DuringService


Benefit


Last Fiscal YearName

Plan Name

(#)


($)(1)


($)C. Gregory Harper

Spectra Energy Retirement Cash Balance Plan


20.62


$
155,593


$
C. Gregory Harper

Spectra Energy Executive Cash Balance Plan


20.62


$
59,832


$
Lon C. Mitchell, Jr.

Spectra Energy Retirement Cash Balance Plan


7.72


$
121,057


$
Lon C. Mitchell, Jr.

Spectra Energy Executive Cash Balance Plan


7.72


$
96,848


$
   Spectra
    Energy Executive Savings Plan
     98




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##### Table of Contents



NONQUALIFIED
    DEFERRED COMPENSATION
  Aggregate


Aggregate


AggregateExecutive


Registrant


Earnings in


Withdrawals /


Balance atContributions in


Contributions in


Last FY


Distributions


Last FYEName

Last FY ($)(1)


Last FY($)(2)


($)(3)


($)


($)C. Gregory Harper Spectra Energy ExecutiveSavings Plan

$
13,042


$
11,309


$
3,992


$



$
57,682Lon C. Mitchell, Jr Spectra Energy ExecutiveSavings Plan

$
78,956


$



$
7,355


$



$
228,804     (1)
    
    Executive contributions credited to the plan in 2007 include
    amounts reported as Salary in the Summary
    Compensation Table as well as Non-Equity Incentive Plan
    Compensation paid in 2007 but reported in the table as
    compensation earned in 2006.(2)
    
    Reflects make-whole matching contribution credits made in 2007
    under the Spectra Energy Corporation Executive Savings Plan with
    respect to elective salary deferrals made by executives during
    2006. See footnote 5 to the Summary Compensation
    Table for the amount of make-whole matching contribution
    credits made to the Spectra Energy Corporation Executive Savings
    Plan in 2008 with respect to elective compensation deferrals
    made by executives during 2007.  Potential
    Payments Upon Termination of Employment or Change in
    Control
   99




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##### Table of Contents



Event

ConsequencesVoluntary termination or involuntary termination with cause (not
    retirement eligible)

Phantom Shares, Performance Shares and Options  the
    executives right to unvested portion of award terminates
    immediatelyVoluntary termination or involuntary termination with cause
    (retirement eligible)

Phantom Shares  continue to vestPerformance Shares  prorated portion of award vests based on actual performance after performance period endsInvoluntary termination without cause (not retirement eligible)

Phantom Shares  prorated portion of award vestsPerformance Shares  prorated portion of award vests based on actual performance after performance period endsInvoluntary or good reason termination after a Change in Control

Phantom Shares  award vests Performance Shares  prorated portion of award vests based on target performanceDeath or Disability

Phantom Shares  prorated portion of award vestsPerformance Shares  prorated portion of award vests
    based on actual performance after performance period ends     Event

ConsequencesVoluntary termination or involuntary termination with cause (not
    retirement eligible)

Phantom Shares and Options  the executives
    right to unvested portion of award terminates immediatelyVoluntary termination or involuntary termination with cause
    (retirement eligible)

Phantom Shares  prorated portion of award continues
    to vestOptions  continue to vestInvoluntary termination without cause (not retirement eligible)

Phantom Shares  prorated portion of award vestsOptions  the executives right to unvested shares terminates immediatelyInvoluntary or good reason termination after a Change in Control

Phantom Shares  award vestsOptions  award vestsDeath or Disability

Phantom Shares  award vestsOptions  award vests      100




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##### Table of Contents



101




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##### Table of Contents



POTENTIAL
    PAYMENTS UPON TERMINATION OF 
    EMPLOYMENT OR A CHANGE IN CONTROL (CIC)
  Cash


Incremental


WelfareSeverance


Retirement


and Similar


Stock


OptionPayment


Plan


Benefits


Awards ($)


Awards ($)


TotalName and Triggering Event(1)

($)(2)


Benefit ($)(3)


($)(4)


(5)(6)


(7)


Payments ($)C. Gregory HarperVoluntary termination or involuntary
    termination with cause










10,577











10,577Involuntary termination without cause










10,577



261,502







272,079Involuntary or good reason termination after a
    CIC


825,000



86,745



41,436



698,255







1,651,436Death










10,577



528,030







538,607Disability










10,577



528,030







538,607Lon C. Mitchell, Jr.Voluntary termination or involuntary
    termination with cause










9,615



347,909







357,524Involuntary termination without cause










9,615



361,642







371,257Involuntary or good reason termination after a
    CIC










9,615



766,268







775,883Death










9,615



551,108







560,723Disability










9,615



551,108







560,723     (1)
    
    Amounts in the above table represent obligations of Spectra
    Energy under agreements currently in place at Spectra Energy,
    and valued as of December 31, 2007.(2)
    
    Amounts listed under Cash Severance Payment are
    payable under the terms of Mr. Harpers change in
    control agreement. The severance benefits set forth above do not
    include accrued salary and bonus payments earned through
    December 31, 2007; however such amounts are reflected in
    the Summary Compensation Table above.(3)
    
    Pursuant to Mr. Harpers Change in Control Agreement,
    amounts listed under Incremental Retirement Plan
    Benefit represent the additional amounts that would be
    credited in respect of the Spectra Energy Retirement Cash
    Balance Plan, Spectra Energy Executive Cash Balance Plan,
    Spectra Energy Retirement Savings Plan and the Spectra Energy
    Executive Savings Plan in the event he continued to be employed
    by Spectra Energy, at his rate of base salary as in effect on
    December 31, 2007, for two additional years.(4)
    
    Amounts listed under Welfare and Other Benefits
    include accrued vacation and the amount that would be paid to
    Mr. Harper who has entered into a Change in Control
    Agreement in lieu of providing continued welfare benefits for
    24 months.(5)
    
    The amounts listed under Stock Awards do not include
    amounts attributable to the performance shares that vested on
    December 31, 2007; such amounts are included in the Option
    Exercises and Stock Vested Table above.(6)
    
    The amounts listed under Stock Awards do not include
    amounts attributable to performance shares that, upon applicable
    termination events, are pro-rated based on service from the
    grant date to December 31, 2007 and vest subject to a
    performance determination at the end of the performance period.
    The amounts listed would be the result of the acceleration of
    the vesting of previously awarded stock as a result of a change
    in control.(7)
    
    The number of shares of common stock underlying options for
    which (a) vesting is accelerated upon the applicable
    termination event or (b) vesting continues after the
    applicable termination event (i.e., due to the executives being
    retirement eligible) for Messrs. Harper and Mitchell were
    20,200 and 30,800, respectively. The exercise price for these
    options is higher than the price of Spectra Energy common stock
    on December 31, 2007 and therefore, the amounts listed
    under Option Awards is zero.   102




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##### Table of Contents



103




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##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    
    each person who then will beneficially own 5% or more of the
    then outstanding units;
    all of the directors of the General Partner;
    each named executive officer of the General Partner; and
    all directors and officers of the General Partner as a group.  Percentage ofTotalCommonPercentage



Percentage of

andCommon

of Common

Subordinated

Subordinated

SubordinatedUnits

Units

Units

Units

UnitsBeneficially

Beneficially

Beneficially

Beneficially

BeneficiallyName of Beneficial Owner(1)

Owned

Owned

Owned

Owned

OwnedSpectra Energy Corp(2)


33,129,880



74.2%



21,638,730



100.0%



82.7%Spectra Energy Transmission LLC


7,873,950



17.6%



5,142,858



23.8%



19.6%Spectra Energy Southeast Pipeline Corp.


25,255,930



56.6%



16,495,872



76.2%



63.0%Martha B. Wyrsch


5,000



*











C. Gregory Harper


8,000



*











Lon C. Mitchell, Jr.


10,000



*











William S. Garner, Jr.






*











Gregory J. Rizzo


5,000



*











Steven D. Arnold


28,718



*











Nora M. Brownell


3,000



*











Stewart A. Bliss


1,218



*











All directors and executive officers as a group (eight persons)


60,936



*











     (*)
    
    Less than 1% of units outstanding.(1)
    
    Unless otherwise indicated, the address for all beneficial
    owners in this table is 5400 Westheimer Court, Houston, TX
    77056.(2)
    
    Spectra Energy is the ultimate parent company of each of Spectra
    Energy Transmission, Spectra Energy Southeast Pipeline Corp. and
    Spectra Energy Partners (DE) GP, LP and may, therefore, be
    deemed to beneficially own the units held by each of these
    entities. 104




---



##### Table of Contents



Equity
    Compensation Plan Information
    Number ofSecurities to be


Weighted


Number of SecuritiesIssued Upon


-Average


Remaining Available forExercise of


Exercise Price


Future Issuance UnderOutstanding


of Outstanding


Equity CompensationOptions,


Options,


Plans (ExcludingWarrants


Warrants and


Securities Reflected inand Rights(1)


Rights


Column(a))(a)


(b)


(c)Equity compensation plans approved by unitholders






n/a



Equity compensation plans not approved by unitholders






n/a



779,750Total






n/a



779,750     (1)
    
    The long-term incentive plan currently permits the grant of
    awards covering an aggregate of 900,000 units.  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.    Distributions
    and Payments to The General Partner and its Affiliates
    Formation
    Stage
  Consideration received by Spectra Energy and its subsidiaries
    for the contribution of the assets and liabilities to Spectra
    Energy Partners

 33,129,880 common units;   21,638,730 subordinated units;
   1,352,421 general partner units;
   incentive distribution rights;
   $319.0 million cash payment from the proceeds of borrowings under Spectra Energy Partners credit facility.  105




---



##### Table of Contents



Operational
    Stage
  Distributions of Available Cash to the General Partner and its
    affiliates

Spectra Energy Partners generally makes cash distributions 98%
    to its unitholders pro rata, including the General Partner and
    its affiliates, as the holders of an aggregate 33,129,880 common
    units 21,638,730 subordinated units, and 2% to the General
    Partner. In addition, if distributions exceed the minimum
    quarterly distribution and other higher target distribution
    levels, the General Partner will be entitled to increasing
    percentages of the distributions, up to 50% of the distributions
    above the highest target distribution level.Payments to the General Partner and its affiliates

Spectra Energy Partners reimburses Spectra Energy and its
    affiliates for the payment of certain operating expenses and for
    the provision of various general and administrative services for
    the benefit of Spectra Energy Partners.Withdrawal or removal the General Partner

If the General Partner withdraws or is removed, its general
    partner interest and its incentive distribution rights will
    either be sold to the new general partner for cash or converted
    into common units, in each case for an amount equal to the fair
    market value of those interests.   Liquidation
    Stage
  Liquidation

Upon Spectra Energy Partners liquidation, the partners,
    including the General Partner, will be entitled to receive
    liquidating distributions according to their respective capital
    account balances.   Agreements
    Governing the Initial Public Offering
    Omnibus
    Agreement
    
    Spectra Energy Partners obligation to reimburse Spectra
    Energy for the payment of direct operating expenses it incurs on
    Spectra Energy Partners behalf in connection with Spectra
    Energy Partners business and operations;
    Spectra Energy Partners obligation to reimburse Spectra
    Energy for providing it allocated corporate, general and
    administrative services, which reimbursement is capped at
    $3.0 million per year, subject to adjustment for inflation
    and increases in connection with expansions of operations
    through the acquisition or construction of new assets or
    businesses with the concurrence of Spectra Energy Partners
    Conflicts Committee; and
    Spectra Energys obligation to indemnify Spectra Energy
    Partners for certain liabilities and Spectra Energy
    Partners obligation to indemnify Spectra Energy for
    certain liabilities. 106




---



##### Table of Contents



Reimbursement
    of Operating and General and Administrative
    Expense
      Competition
    Indemnification
     107




---



##### Table of Contents



Acquisition
    from Affiliates
  20-day
    Contracts
    with Affiliates
  Gulfstream
    Limited Liability Company Agreement
        Market
    Hub General Partnership Agreement
   108




---



##### Table of Contents



Storage
    and Transportation Related Arrangements
    East Tennessee.
  Market Hub.
  Director
    Independence
    Item 14.
    Principal
    Accounting Fees and Services.    Type of Fees

2007


2006(In millions)Audit Fees(a)

$
1.4


$
0.1Total Fee:

$
1.4


$
0.1     (a)
    
    Audit Fees are fees billed or expected to be billed by Deloitte
    for professional services for the audit of Spectra Energy
    Partners Consolidated Financial Statements included in
    Spectra Energy Partners annual report on
    Form 10-K
    and review of financial statements included in Spectra Energy
    Partners quarterly reports on
    Form 10-Q,
    services that are normally provided by Deloitte in connection
    with statutory, regulatory or other filings or engagements or
    any other service performed by Deloitte to comply with generally
    accepted auditing standards. 2007 Audit Fees include $0.8
    million for the audits of the combined Spectra Energy Partner
    Predecessors financial statements for the 2004, 2005 and
    2006 periods and for the 2007 first quarter review, all of which
    were included in the 2007 Registration Statement on Form
    S-1.   109




---



##### Table of Contents



PART IV Item 15.
    Exhibits,
    Financial Statement Schedules.                    Rule 3-09 Regulation S-X:
                                10-K.
 110




---



##### Table of Contents



SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of
    the Securities Exchange Act of 1934, the registrant has duly
    caused this report to be signed on its behalf by the
    undersigned, thereunto duly authorized.
    By:
    Spectra Energy Partners (DE) GP, LP, 
    its general partnerBy:
    Spectra Energy Partners GP, LLC,
    its general partner   
       
     111




---



##### Table of Contents





FINANCIAL
    STATEMENTS OF
 GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
  INDEX TO
    FINANCIAL STATEMENTS
  PageFinancial Statements:Independent Auditors Report


F-2Statements of Operations for the years ended
    December 31, 2007, 2006 and 2005


F-3Balance Sheets as of December 31, 2007 and
    2006


F-4Statements of Cash Flows for the years ended
    December 31, 2007, 2006 and 2005


F-5Statements of Members Equity and
    Comprehensive Income for the years ended December 31, 2007,
    2006 and 2005


F-6Notes to Financial Statements


F-7  F-1




---



##### Table of Contents



INDEPENDENT
    AUDITORS REPORT



To the Members of Gulfstream Natural Gas System, L.L.C.

Houston, Texas



We have audited the accompanying balance sheets of Gulfstream
    Natural Gas System, L.L.C., (the Company), as of
    December 31, 2007 and 2006, and the related statements of
    operations, members equity and comprehensive income, and
    cash flows for each of the three years in the period ended
    December 31, 2007. These financial statements are the
    responsibility of the Companys management. Our
    responsibility is to express an opinion on these financial
    statements based on our audits.



We conducted our audits in accordance with generally accepted
    auditing standards as established by the Auditing Standards
    Board (United States) and in accordance with the auditing
    standards of the Public Company Accounting Oversight Board
    (United States). Those standards require that we plan and
    perform the audit to obtain reasonable assurance about whether
    the financial statements are free of material misstatement. The
    Company is not required to have, nor were we engaged to perform,
    an audit of its internal control over financial reporting. Our
    audits included consideration of internal control over financial
    reporting as a basis for designing audit procedures that are
    appropriate in the circumstances, but not for the purpose of
    expressing an opinion on the effectiveness of the Companys
    internal control over financial reporting. Accordingly, we
    express no such opinion. An audit also includes examining, on a
    test basis, evidence supporting the amounts and disclosures in
    the financial statements, assessing the accounting principles
    used and significant estimates made by management, as well as
    evaluating the overall financial statement presentation. We
    believe that our audits provide a reasonable basis for our
    opinion.



In our opinion, such financial statements present fairly, in all
    material respects, the financial position of Gulfstream Natural
    Gas System, L.L.C. as of December 31, 2007 and 2006, and
    the results of their operations and their cash flows for each of
    the three years in the period ended December 31, 2007 in
    conformity with accounting principles generally accepted in the
    United States of America.





/s/  Deloitte &
    Touche LLP



Houston, Texas

March 19, 2008

F-2




---



##### Table of Contents



GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
 STATEMENTS
    OF OPERATIONS  Years Ended December 31,2007


2006


2005(In millions)Operating RevenuesTransportation of natural gas

$
183.7


$
178.8


$
140.3Other


1.6



1.5



4.8Total operating revenues


185.3



180.3



145.1Operating ExpensesOperating, maintenance and other


1.0



7.2



1.5Operating, maintenance and other  affiliates


9.2



8.0



7.8Depreciation and amortization


30.0



30.4



29.2Property and other taxes


5.7



17.9



15.1Total operating expenses


45.9



63.5



53.6Gains on Sales of Other Assets






0.1



Operating Income


139.4



116.9



91.5Other Income and Expenses, net


3.9



0.3



1.8Interest Expense


47.9



48.8



25.5Net Income

$
95.4


$
68.4


$
67.8    F-3




---



##### Table of Contents



GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
 BALANCE
    SHEETS  December 31,2007


2006(In millions)ASSETSCurrent AssetsCash and cash equivalents

$
73.7


$
29.4Receivables


16.2



15.0Other


6.1



2.3Total current assets


96.0



46.7Property, Plant and EquipmentCost


1,786.3



1,719.1Less accumulated depreciation and amortization


147.8



123.9Net property, plant and equipment


1,638.5



1,595.2Regulatory Assets and Deferred DebitsRegulatory tax asset  allowance for funds used during
    construction


22.9



22.5Unamortized debt expense


7.2



7.9Other


0.5



0.2Total regulatory assets and deferred debits


30.6



30.6Total Assets

$
1,765.1


$
1,672.5LIABILITIES AND MEMBERS EQUITYCurrent LiabilitiesAccounts payable

$
4.4


$
2.0Accounts payable  affiliates


1.0



0.9Taxes accrued


5.8



14.0Interest accrued


8.2



8.2Accrued liabilities


6.0



5.7Fuel tracker liabilities


3.1



2.5Other


2.4



1.4Total current liabilities


30.9



34.7Long-term Debt


849.6



849.6Other Long-term Liabilities


0.1



6.1Commitments and ContingenciesMembers EquityMembers equity


870.3



766.6Accumulated other comprehensive income


14.2



15.5Total members equity


884.5



782.1Total Liabilities and Members Equity

$
1,765.1


$
1,672.5    F-4




---



##### Table of Contents



GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
 STATEMENTS
    OF CASH FLOWS  Years Ended December 31,2007


2006


2005(In millions)CASH FLOWS FROM OPERATING ACTIVITIESNet income

$
95.4


$
68.4


$
67.8Adjustments to reconcile net income to net cash provided by 
    operating activities:Depreciation and amortization


30.6



31.1



33.7Gains on sales of assets






(0.1
)


Allowance for funds used during construction  equity


(1.8
)


(0.2
)


(1.1
)Reclassification adjustments from accumulated other
    comprehensive income into net income


(1.3
)


(1.3
)


(0.2
)Decrease (increase) in:Receivables


(1.2
)


3.8



(9.7
)Other current assets


(4.7
)


(0.5
)


(0.1
)Increase (decrease) in:Accounts payable


1.1



1.0



(2.1
)Taxes accrued


(8.2
)


8.1



4.9Interest accrued






(0.7
)


6.7Accrued liabilities






(0.9
)


5.8Fuel tracker liabilities






(2.3
)


3.0Other current liabilities


1.0



3.2



2.9Other, assets


(3.0
)


2.8



0.4Other, liabilities


(0.2
)


(5.3
)


(0.1
)Net cash provided by operating activities


107.7



107.1



111.9CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures


(71.2
)


(21.7
)


(62.2
)Net cash used in investing activities


(71.2
)


(21.7
)


(62.2
)CASH FLOWS FROM FINANCING ACTIVITIESCapital contributions from members


76.4







Distributions to members


(68.6
)


(83.0
)


(742.0
)Proceeds from the settlement of hedge instruments










17.0Proceeds from the issuance of long-term debt










892.1Payments for the redemption of long-term debt










(217.7
)Payments for debt issuance costs






(0.3
)


(8.4
)Net cash provided by (used in) financing activities


7.8



(83.3
)


(59.0
)Net increase (decrease) in cash and cash equivalents


44.3



2.1



(9.3
)Cash and cash equivalents at beginning of year


29.4



27.3



36.6Cash and cash equivalents at end of year

$
73.7


$
29.4


$
27.3Supplemental DisclosuresCash paid for interest, net of amount capitalized

$
49.0


$
49.4


$
15.8Significant non-cash transaction:Contribution in aid of construction










16.7    F-5




---



##### Table of Contents



GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
 STATEMENTS
    OF MEMBERS EQUITY AND COMPREHENSIVE INCOME  Spectra


TheEnergy


WilliamsSpectra


Partners,


Companies,Energy Corp


LP


Inc.


Total(In millions)Balance December 31, 2004

$
727.7


$



$
727.7


$
1,455.4Net income


33.9







33.9



67.8Other comprehensive incomeNet unrealized gain on cash flow hedges


8.5







8.5



17.0Reclassification of cash flow hedges into earnings


(0.1
)






(0.1
)


(0.2
)Total comprehensive income














84.6Distributions to members


(371.0
)






(371.0
)


(742.0
)Attributed deferred tax benefit


0.2







0.1



0.3Balance December 31, 2005


399.2







399.1



798.3Net income


34.2







34.2



68.4Other comprehensive incomeReclassification of cash flow hedges into earnings


(0.7
)






(0.6
)


(1.3
)Total comprehensive income (as restated, see Note 2)














67.1Distributions to members


(41.5
)






(41.5
)


(83.0
)Attributed deferred tax expense


(0.2
)






(0.1
)


(0.3
)Balance December 31, 2006


391.0







391.1



782.1Net income attributable to the period January 1, 2007
    through July 2, 2007


17.3







17.2



34.5Net income attributable to the period July 3, 2007 through
    December 31, 2007


15.5



14.9



30.5



60.9Other comprehensive incomeReclassification of cash flow hedges into earnings attributable
    to the period January 1, 2007 through July 2, 2007


(0.3
)






(0.3
)


(0.6
)Reclassification of cash flow hedges into earnings attributable
    to the period July 3, 2007 through December 31, 2007


(0.2
)


(0.2
)


(0.3
)


(0.7
)Total comprehensive income














94.1Ownership change


(197.1
)


197.1







Capital contributions from members


20.3



17.9



38.2



76.4Distributions to members


(21.2
)


(13.1
)


(34.3
)


(68.6
)Attributed deferred tax benefit


0.2



0.1



0.2



0.5Balance December 31, 2007

$
225.5


$
216.7


$
442.3


$
884.5    F-6




---



##### Table of Contents



GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
  Notes
    to Financial Statements
  1.
    Summary
    of Operations and Significant Accounting Policies  Nature of Operations. 700-mile
    Basis of Presentation.
  Use of Estimates.
  Cash and Cash Equivalents.
  Cash Flow Hedges.
     F-7




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##### Table of Contents



GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
  Notes to
    Financial Statements  (Continued)
  Property, Plant and Equipment.
    Unamortized Debt Expense.
  Cost-Based Regulation.
  Revenue Recognition.
  Significant Customers.
  % of RevenuesCustomer

2007


2006


2005Florida Power & Light Company


50
%


51
%


41
%Florida Power Corporation


22



22



23TECO Energy and subsidiaries


10



10



13  F-8




---



##### Table of Contents



GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
  Notes to
    Financial Statements  (Continued)
  Allowance for Funds Used During Construction
    (AFUDC).
    Preliminary Project Costs.
  Income Taxes. gross-up
  New Accounting Pronouncements 
    2007.
  AIR-1, AIR-1. accrue-in-advance AIR-1
  New Accounting
    Pronouncements  Pending.
     F-9




---



##### Table of Contents



GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
  Notes to
    Financial Statements  (Continued)
  2.
    Restatement
    of 2006 Statement of Comprehensive Income    Year EndedDecember 31, 2006As reported


As restated(In millions)Net Income

$
68.4


$
68.4Other Comprehensive IncomeNet unrealized gain on cash flow hedges


16.8



Reclassification adjustment into earnings


(1.3
)


(1.3
)Total other comprehensive income


15.5



(1.3
)Total Comprehensive Income

$
83.9


$
67.1   3.
    Transactions
    with Affiliates        Statements
    of Operations
  2007


2006


2005(In millions)Operating, maintenance and other expenses

$
9.2


$
8.0


$
7.8   Balance
    Sheets
  December 31,2007


2006(In millions)Property, plant and equipment(a)

$
5.2


$
3.0Accounts payable


1.0



0.9     (a)
    
    Reflects additions to Property, Plant and Equipment billed from
    an affiliate in the respective year. F-10




---



##### Table of Contents



GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
  Notes to
    Financial Statements  (Continued)
   4.
    Regulatory
    Matters  Regulatory Assets.
  December 31,


Recovery/Refund2007


2006


Period Ends(In millions)Regulatory Assets(1)Regulatory asset related to income taxes

$
22.9


$
22.5



(2
)     (1)
    
    Included in Regulatory Assets and Deferred Debits on the Balance
    Sheets.(2)
    
    Amortized over the life of the related property, plant and
    equipment.    Rate Related Information.
  5.
    Property,
    Plant and Equipment  Estimated


December 31,Useful Life


2007


2006(years)


(In millions)Natural gas transmission


60


$
1,645.6


$
1,642.9Land






18.0



18.0Construction in process






81.2



12.2Other


5-20



41.5



46.0Total property, plant and equipment






1,786.3



1,719.1Total accumulated depreciation






(147.8
)


(123.9
)Total net property, plant and equipment





$
1,638.5


$
1,595.2   6.
    Debt  Summary
    of Debt and Related Terms
  December 31,Year Due


2007


2006(In millions)Unsecured note payable, 5.56%


2015


$
500.0


$
500.0Unsecured note payable, 6.19%


2025



350.0



350.0Unamortized debt discount






(0.4
)


(0.4
)Total long-term debt





$
849.6


$
849.6   7.
    Hedging
    Activities, Financial Instruments and Credit Risk  Interest Rate Cash Flow Hedges.
 F-11




---



##### Table of Contents



GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
  Notes to
    Financial Statements  (Continued)
    Financial Instruments.
  Financial
    Instruments
  December 31,2007


2006Approximate





ApproximateBook Value


Fair Value


Book Value


Fair Value(In millions)Long-term debt

$
849.6


$
847.9


$
849.6


$
852.5     Credit Risk.
  8.
    Commitments
    and Contingencies  General Insurance.
    Environmental.
 F-12




---



##### Table of Contents



GULFSTREAM
    NATURAL GAS SYSTEM, L.L.C.
  Notes to
    Financial Statements  (Continued)
  Litigation.
  9.
    Subsequent
    Event   F-13




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##### Table of Contents



CONSOLIDATED
    FINANCIAL STATEMENTS OF
    MARKET HUB PARTNERS HOLDING
    (formerly Market Hub Partners Holding, LLC)
    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
  PageConsolidated Financial Statements:Independent Auditors Report


F-15Consolidated Statements of Operations for the
    years ended December 31, 2007, 2006 and 2005


F-16Consolidated Balance Sheets as of
    December 31, 2007 and 2006


F-17Consolidated Statements of Cash Flows for the
    years ended December 31, 2007, 2006 and 2005


F-18Consolidated Statements of Partners Capital
    / Members Equity for the years ended December 31,
    2007, 2006 and 2005


F-19Notes to Consolidated Financial Statements


F-20  F-14




---



##### Table of Contents



INDEPENDENT
    AUDITORS REPORT              
    F-15




---



##### Table of Contents



MARKET
    HUB PARTNERS HOLDING
    (formerly Market Hub Partners Holding, LLC)
 CONSOLIDATED
    STATEMENTS OF OPERATIONS  Years Ended December 31,2006


2005(as restated,


(as restated,2007


see Note 2)


see Note 2)(In millions)Operating RevenuesSalt cavern storage

$
71.0


$
66.7


$
57.5Salt cavern storage  affiliates


3.6



1.9



1.9Hub services and other


9.9



3.9



8.7Hub services and other  affiliates


6.8



6.3



9.9Total operating revenues


91.3



78.8



78.0Operating ExpensesOperating, maintenance and other


18.8



14.2



3.7Operating, maintenance and other  affiliates


2.5



12.1



5.8Depreciation and amortization


9.1



7.8



6.9Property and other taxes


2.3



4.0



3.4Total operating expenses


32.7



38.1



19.8Gains on Sales of Other Assets


7.0



10.6



1.2Operating Income


65.6



51.3



59.4Interest Income  Affiliates


2.3







Interest Expense  Affiliates


3.6



2.6



Earnings Before Income Taxes


64.3



48.7



59.4Income Tax Expense


0.1







Net Income

$
64.2


$
48.7


$
59.4    F-16




---



##### Table of Contents



MARKET
    HUB PARTNERS HOLDING
    (formerly Market Hub Partners Holding, LLC)
 CONSOLIDATED
    BALANCE SHEETS  December 31,2007


2006(In millions)ASSETSCurrent AssetsCash and cash equivalents

$
21.7


$
Receivables


7.5



12.1Natural gas imbalance receivables


13.7



5.9Natural gas imbalance receivables  affiliates


14.5



39.3Notes receivable  affiliates


100.0



Inventory


0.4



0.9Total current assets


157.8



58.2Other AssetsAdvances receivable  affiliates






94.2Goodwill


200.5



200.5Other assets


0.1



0.1Total other assets


200.6



294.8Property, Plant and EquipmentCost


408.4



370.7Less accumulated depreciation and amortization


69.9



62.5Net property, plant and equipment


338.5



308.2Total Assets

$
696.9


$
661.2LIABILITIES AND PARTNERS CAPITAL / MEMBERS
    EQUITYCurrent LiabilitiesAccounts payable

$
4.1


$
6.0Accounts payable  affiliates


1.3



Taxes accrued


1.8



1.3Interest accrued  affiliates


6.0



2.6Natural gas imbalance payables


29.2



43.8Natural gas imbalance payables  affiliates






2.5Collateral liabilities


2.2



3.6Collateral liabilities  affiliates


80.0



55.0Other


3.1



5.5Total current liabilities


127.7



120.3Deferred Credits and Other LiabilitiesAdvances payable  affiliates


1.1



Collateral liabilities  affiliates






25.0Total deferred credits and other liabilities


1.1



25.0Commitments and ContingenciesPartners Capital / Members EquityPartners capital


568.1



Members equity






515.9Total partners capital / members equity


568.1



515.9Total Liabilities and Partners Capital / Members
    Equity

$
696.9


$
661.2    F-17




---



##### Table of Contents



MARKET
    HUB PARTNERS HOLDING
    (formerly Market Hub Partners Holding, LLC)
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Years Ended December 31,2006


2005(as restated,


(as restated,2007


see Note 2)


see Note 2)(In millions)CASH FLOWS FROM OPERATING ACTIVITIESNet income

$
64.2


$
48.7


$
59.4Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


9.1



7.8



6.9Gains on sales of other assets


(7.0
)


(10.6
)


(1.2
)Decrease (increase) in:Receivables


2.9



5.9



10.1Inventory


0.5



6.1



(3.1
)Other, assets


4.5



6.2



(1.1
)Increase (decrease) in:Accounts payable


5.1



5.3



(0.9
)Accounts payable  affiliates


1.3



(0.5
)


0.5Taxes accrued


(2.2
)


0.4



(0.5
)Collateral liabilities  current


(1.4
)


1.3



0.5Collateral liabilities  affiliates  current






55.0



Other current liabilities


1.0



2.6



(14.5
)Collateral liabilities  affiliates 
    noncurrent






25.0



Net cash provided by operating activities


78.0



153.2



56.1CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures


(49.7
)


(54.1
)


(38.0
)Net decrease (increase) in advances receivable 
    affiliates


75.5



(94.2
)


Net increase (decrease) in advances payable 
    affiliates


1.1



(20.5
)


(24.3
)Net increase in notes receivable  affiliates


(100.0
)






Net proceeds from insurance claim  affiliates


9.2



15.6



6.2Net cash used in investing activities


(63.9
)


(153.2
)


(56.1
)CASH FLOWS FROM FINANCING ACTIVITIESDistributions to partners


(11.7
)






Capital contributions from partners


19.3







Net cash provided by financing activities


7.6







Net increase in cash and cash equivalents


21.7







Cash and cash equivalents at beginning of year










Cash and cash equivalents at end of year

$
21.7


$



$
Supplemental DisclosuresSignificant non-cash transactions:Transfers of assets to parent

$
19.6


$



$
Property, plant and equipment accruals


1.0



4.9



1.8Intercompany property, plant and equipment transfers


4.7







Interaccount property, plant and equipment transfers/reclasses










2.0    F-18




---



##### Table of Contents



MARKET
    HUB PARTNERS HOLDING
    (formerly Market Hub Partners Holding, LLC)
 CONSOLIDATED
    STATEMENTS OF PARTNERS CAPITAL / MEMBERS
    EQUITY  SpectraSpectra


EnergyEnergy Corp


Partners, LP


Total(In millions)Balance December 31, 2004

$
407.8


$



$
407.8Net income


59.4







59.4Balance December 31, 2005


467.2







467.2Net income


48.7







48.7Balance December 31, 2006


515.9







515.9Net income attributable to the period January 1, 2007
    through July 2, 2007


29.1







29.1Transfers of assets to parent


(19.6
)






(19.6
)Ownership change


(262.7
)


262.7



Net income attributable to the period July 3, 2007 through
    December 31, 2007


17.5



17.6



35.1Capital contributions from partners


9.6



9.7



19.3Distributions to partners


(5.8
)


(5.9
)


(11.7
)Balance December 31, 2007

$
284.0


$
284.1


$
568.1    F-19




---



##### Table of Contents



MARKET
    HUB PARTNERS HOLDING
    (formerly Market Hub Partners Holding, LLC)
 Notes to
    Consolidated Financial Statements  1.
    Summary
    of Operations and Significant Accounting Policies  Nature of Operations.
    Basis of Presentation.
  Use of Estimates.
  Cash and Cash Equivalents.
  Natural Gas Imbalances.
  Goodwill.
     F-20




---



##### Table of Contents



MARKET
    HUB PARTNERS HOLDING
    (formerly Market Hub Partners Holding, LLC)
  Notes to Consolidated Financial
    Statements  (Continued)
  Property, Plant and Equipment.
    Revenue Recognition.
  Significant Customers.
  % of Consolidated RevenuesCustomer

2007

2006

2005Northern Indiana Public Service Company


(a
)


11
%


11
%Spectra Energy


11
%


(a
)


(a
)     (a)
    
    Percentage below 10%  Income Taxes.
  New Accounting Pronouncements 
    2007.
  accrue-in-advance
  New Accounting Pronouncements 
    Pending.
   F-21




---



##### Table of Contents



MARKET
    HUB PARTNERS HOLDING
    (formerly Market Hub Partners Holding, LLC)
  Notes to Consolidated Financial
    Statements  (Continued)
      2.
    Restatements  Consolidated Statements of Operations.
  2006


2005Previously





PreviouslyReported


Restated


Reported


Restated(In millions)Operating RevenuesSalt cavern storage

$
75.6


$
66.7


$
64.7


$
57.5Salt cavern storage  affiliates


0.3



1.9



3.6



1.9Other


2.9







9.7



Hub services and other






3.9







8.7Hub services and other  affiliates






6.3







9.9Total operating revenues

$
78.8


$
78.8


$
78.0


$
78.0   Consolidated Statements of Cash Flows.
  2006


2005Previously





PreviouslyReported


Restated


Reported


Restated(In millions)Cash Flows From Operating ActivitiesDecrease (increase) in receivables

$
5.9


$
5.9


$
16.3


$
10.1Decrease (increase) in other, assets


21.6



6.2



(1.1
)


(1.1
)Net cash provided by operating activities


168.8



153.2



62.3



56.1Cash Flows From Investing ActivitiesNet proceeds from insurance claim   affiliates






15.6







6.2Net cash used in investing activities


(168.8
)


(153.2
)


(62.3
)


(56.1
)  F-22




---



##### Table of Contents



MARKET
    HUB PARTNERS HOLDING
    (formerly Market Hub Partners Holding, LLC)
  Notes to Consolidated Financial
    Statements  (Continued)
  3.
    Transactions
    with Affiliates                 F-23




---



##### Table of Contents



MARKET
    HUB PARTNERS HOLDING
    (formerly Market Hub Partners Holding, LLC)
  Notes to Consolidated Financial
    Statements  (Continued)
  4.
    Property,
    Plant and Equipment  EstimatedUseful


December 31,Life


2007


2006(In millions)(Years)Salt cavern storage facilities


15-40


$
378.6


$
312.8Land






12.4



12.4Construction in process






16.5



42.6Other


5-40



0.9



2.9Total property, plant and equipment






408.4



370.7Total accumulated depreciation






(69.9
)


(62.5
)Total net property, plant and equipment





$
338.5


$
308.2   5.
    Credit
    Risk and Financial Instruments  Credit Risk.
  Financial Instruments.
  6.
    Commitments
    and Contingencies  General Insurance.
  Environmental.
 F-24




---



##### Table of Contents



MARKET
    HUB PARTNERS HOLDING
    (formerly Market Hub Partners Holding, LLC)
  Notes to Consolidated Financial
    Statements  (Continued)
  Litigation.
  7.
    Subsequent
    Event   F-25




---



##### Table of Contents



Exhibit Index
  Exhibit No.

Exhibit Description3
.1

First Amended and Restated Agreement of Limited Partnership of
    Spectra Energy Partners, LP (filed as Exhibit 3.1 to Spectra
    Energy Partners, LPs Form 8-K dated July 9, 2007).3
.2

First Amended and Restated Agreement of Limited Partnership
    Agreement of Spectra Energy Partners (DE) GP, LP (filed as
    Exhibit 3.2 to Spectra Energy Partners, LPs Form 8-K dated
    July 9, 2007).3
.3

First Amended and Restated Limited Liability Agreement of
    Spectra Energy Partners GP, LLC (filed as Exhibit 3.3 to Spectra
    Energy Partners, LPs Form 8-K dated July 9, 2007).10
.1

Contribution, Conveyance and Assumption Agreement, dated July 2,
    2007, by and among Spectra Energy Partners, LP, Spectra Energy
    Partners OLP, LP, Spectra Energy Partners GP, LLC, Spectra
    Energy Partners OLP GP, LLC, Spectra Energy Partners (DE) GP,
    LP, Spectra Energy Transmission, LLC, Spectra Energy Southeast
    Pipeline Corporation, East Tennessee Natural Gas, LLC, Egan Hub
    Storage, LLC, Moss Bluff Hub, LLC and Market Hub Partners
    Holding, LLC (filed as Exhibit 10.1 to Spectra Energy Partners,
    LPs Form 8-K dated July 9, 2007).10
.2

Omnibus Agreement, dated July 2, 2007, by and among Spectra
    Energy Partners, LP, Spectra Energy Partners (DE) GP, LP,
    Spectra Energy Partners GP, LLC and Spectra Energy Corp (filed
    as Exhibit 10.2 to Spectra Energy Partners, LPs Form 8-K
    dated July 9, 2007).+10
.3

Long Term Incentive Plan of Spectra Energy Partners, LP (filed
    as Exhibit 10.3 to Spectra Energy Partners, LPs Form 8-K
    dated July 9, 2007).10
.4

General Partnership Agreement of Market Hub Partners Holding
    (filed as Exhibit 10.4 to Spectra Energy Partners, LPs
    Form 8-K dated July 9, 2007).10
.5

First Amendment to Credit Agreement, dated as of September 30,
    2007, by and among Spectra Energy Partners OLP, LP, as the
    Borrower, Spectra Energy Partners, LP, as Parent Guarantor and
    Wachovia Bank, National Association, as Administrative Agent,
    and the other lenders party thereto (filed as Exhibit 10.1 to
    Spectra Energy Partners, LPs Form 8-K dated October 11,
    2007).10
.6

Contribution Agreement, dated December 13, 2007, by and among
    Spectra Energy Transmission, LLC, Spectra Energy Partners (DE)
    GP, LP and Spectra Energy Partners, LP (filed as Exhibit 10.1 to
    Spectra Energy Partners, LPs Form 8-K dated December 14,
    2007).10
.7

Asset Purchase Agreement, dated December 13, 2007, between
    Spectra Energy Virginia Pipeline Company and East Tennessee
    Natural Gas, LLC (filed as Exhibit 10.2 to Spectra Energy
    Partners, LPs Form 8-K dated December 14, 2007).*21
.1

Subsidiaries of the Registrant.*24
.1

Power of Attorney.*31
.1

Certification of the Chief Executive Officer Pursuant to Section
    302 of the Sarbanes-Oxley Act of 2002.*31
.2

Certification of the Chief Financial Officer Pursuant to Section
    302 of the Sarbanes-Oxley Act of 2002.*32
.1

Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002.*32
.2

Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002.     *
    
    Filed herewith.+
    
    Denotes management contract or compensatory plan or arrangement.