TransCanada Corp.is dropping down its 49.9% interest in Portland Natural Gas LP (PNGTS) to its master limited partnership, TC PipeLines LP, for a purchase price of US$223 million. PNGTS is a 295-mile interstate natural gas pipeline that began serving New England in March 1999. The pipeline connects with the TransQuebec and Maritimes Pipeline at the Canadian border near East Hereford, Quebec and delivers gas to customers in the U.S. Northeast. "The PNGTS transaction is a continuation of our strategy to drop down the remainder of TransCanada's U.S. natural gas pipeline assets to the TC PipeLines partnership," said TransCanada CEO Russ Girling. "Asset sales to the partnership provide TransCanada with cash proceeds to help fund our capital program and further diversify the partnership's asset base, positioning it for continued growth." The price includes US$35 million of debt to be assumed. Earnings before interest, taxes, depreciation and amortization from the 49.9% interest is expected to be US$23 million in 2016. The sales agreement also provides for additional payments from TC PipeLines if PNGTS is expanded in the future. Closing is expected by year-end.
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