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NEWS RELEASE

September 11, 2008

UNION GAS INITIATES PREFERENCE SHARE REDEMPTIONS IN CONNECTION WITH CORPORATE STRUCTURE CHANGE

CHATHAM, ONTARIO - Union Gas Limited announced today that it has received Board of Directors approval to initiate the redemption of all preference shares Union Gas has issued and outstanding.  This share redemption would be effective January 1, 2009.  The redemption would be undertaken in order to implement a new corporate legal structure that achieves financial benefits which far exceed share redemption expenses.

Union Gas will require approval from the Ontario Energy Board in connection with an internal share transfer that, together with the share redemption, would ultimately lead to the conversion of Union Gas into an unlimited liability company.

Union Gas reserves the right to not proceed with the redemption of the preference shares or the other reorganization actions. Should Union Gas determine to proceed with the redemption, it will issue a formal notice of redemption to the holders of preference shares in accordance with the preference share rights and restrictions.

Union Gas currently has the following classes of preference shares issued and outstanding:

  1. 47,672 5.5% Cumulative Redeemable Class A Preference Shares, Series A;
  2. 90,000 6% Cumulative Redeemable Class A Preference Shares, Series B;
  3. 49,500 5% Cumulative Redeemable Class A Preference Shares, Series C; and
  4. 4,000,000 4.79% Cumulative Redeemable Convertible Class B Preference Shares, Series 11.

Union Gas is an integrated natural gas storage, transmission and distribution company serving about 1.3 million residential, commercial and industrial customers in more than 400 communities in northern, south-western and eastern Ontario.  Union Gas is a Spectra Energy company.  Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company,  is one of North America’s premier natural gas infrastructure companies serving three key links in the natural gas value chain: gathering and processing, transmission and storage, and distribution. For nearly a century, Spectra Energy and its predecessor companies have developed critically important pipelines and related infrastructure connecting natural gas supply sources to premium markets. Based in Houston, Texas, the company operates in the United States and Canada approximately 18,000 miles of transmission pipeline, 265 billion cubic feet of storage, natural gas gathering and processing, natural gas liquids operations and local distribution assets. Spectra Energy Corp also has a 50 percent ownership in DCP Midstream, the largest natural gas gatherer and processor in the United States. For more information, visit www.spectraenergy.com.

CONTACT: Andrea Stass
Phone: (519) 436-5490

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