To help fund the corporation’s planned growth, TransCanada Corp. is selling its North Baja Pipeline LLC to affiliate partnership TC PipeLines LP for US$395 million.

TransCanada acquired the North Baja Pipeline system in 2004; it would continue to operate the pipe once the ownership is transferred. The 80-mile natural gas pipeline extends from southwestern Arizona to a point on the California/Mexico border and connects with a system in Mexico. North Baja consists of 30- and 36-inch diameter pipeline with a capacity of 600 MMcf/d.

The transaction would net TransCanada US$200 million in cash and give it an additional 6.37 million common units in the partnership. Once the transaction closes, which is expected by the end of June, TransCanada’s ownership of the partnership would increase to 42.6%.

“We are in the midst of a large capital program that will create significant long-term value for our shareholders and the proceeds from the sale of North Baja will be redeployed to help fund our growth initiatives,” said CEO Hal Kvisle.

By selling the North Baja pipe and increasing its ownership in the partnership, Kvisle said the partnership could “potentially play a greater role in the financing of TransCanada’s C$19 billion capital program.”

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