Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On September 2, 2008, Union Gas Limited (Union Gas), a subsidiary of Spectra Energy Corp (Spectra Energy), issued 300 million Canadian dollars (approximately $281 million) aggregate principal amount of its 6.05% Medium Term Notes due 2038 (the Notes). The Notes were offered only in Canada under a short form shelf prospectus pursuant to Canadian securities laws. The net proceeds of the offering will be used for general corporate purposes.

The Notes were issued pursuant to a supplement, dated September 2, 2008, to an indenture, dated August 1, 1968, between Union Gas and CIBC Mellon Trust Corporation, as trustee (the Indenture). Interest on the Notes will accrue from September 2, 2008. Union Gas will pay interest on the Notes semi-annually on March 2 and September 2 of each year, beginning on March 2, 2009, until the Notes mature on September 2, 2038. Union Gas may redeem some or all of the Notes at any time or from time to time pursuant to the terms of the Indenture. The Indenture contains covenants that limit the ability of Union Gas to, among other things, incur additional debt, create liens on or sell its principal assets or merge with other entities.

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