CALGARY, Alta. - TransCanada Corp. (NYSE: TRP) on April 26 announced it has entered into agreements to sell a 25 percent interest in each of Gas Transmission Northwest LLC (GTN) and Bison Pipeline LLC to TC PipeLines, LP (NASDAQ: TCLP) for US$605 million, which includes US$81 million or 25 per ent of GTN's debt. The sale is expected to close in May 2011 and is subject to normal closing conditions.
"The proceeds from the sale of a 25 percent interest in both GTN and Bison will be used to help fund TransCanada's capital program," said Russ Girling, president and chief executive officer of TransCanada. "Once the transaction is complete, TransCanada will hold a 75 percent ownership interest in both pipelines and will continue to manage and operate these high quality assets as part of its integrated North American natural gas transmission network.”
The GTN pipeline system is a 1,353-mile natural gas transmission system that transports Western Canada Sedimentary Basin and Rocky Mountain-sourced natural gas to third party natural gas pipelines and markets in Washington, Oregon and California, and connects with the Partnership's Tuscarora pipeline system.
Bison is a new 303-mile natural gas pipeline connecting Rocky Mountain gas supply to downstream markets via the Northern Border pipeline system. The pipeline was constructed in 2010 and placed in service in January 2011. Shippers have contracts for 0.4 billion cubic feet per day on both Bison and Northern Border that expire in 2021. The Partnership has a 50 percent ownership interest in Northern Border.
TransCanada currently holds a 38.2 percent interest in TC PipeLines, LP, a U.S. master limited partnership.
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