Spectra Energy Partners LP (SEP) said Wednesday that it will acquire Atlas Pipeline Partners LP's (APL) NOARK Pipeline System for $300 million in cash.

As tumbling commodity prices and slumping gas demand squeeze small pipeline operators like Atlas Pipeline, Spectra and other large, well-capitalized companies have been on the lookout for bargain buys. Williams Cos. (WMB) said last week it is forming a natural gas gathering and processing joint venture with Atlas Pipeline, in a move that will strengthen Atlas' balance sheet and give Williams a foothold in Appalachia's Marcellus Shale, one of the largest U.S. onshore gas fields.

The Spectra acquisition includes Ozark Gas Transmission LLC, a 565-mile natural gas transmission pipeline system that extends from Oklahoma to Missouri. The system, which connects to Spectra Energy Corp.'s (SE) Texas Eastern Transmission System, links supplies in Oklahoma's Fayetteville Shale and Arkoma Basin to Midwest and Northeast markets.

The deal also includes Ozark Gas Gathering LLC, a 365-mile natural gas gathering system in eastern Oklahoma and western Arkansas. Spectra Energy Partners said it expects the acquisitions to close in the second quarter of 2009.

Spectra Energy Partners is a natural gas pipeline and storage operator formed by Spectra Energy out of the former natural gas holdings of Duke Energy Corp (DUK).

Atlas Pipeline Partners shares were last up 20 cents, or 4.4%, at $4.75 Wednesday morning. Spectra Energy Partners shares were up 19 cents, or 0.9%, at $21.78.

-By Christine Buurma, Dow Jones Newswires; 201-938-2061; christine.buurma@dowjones.com

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