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TransCanada Boosts Stake in TC Pipelines by $300M

TransCanada Corp. said Wednesday that subsidiary TransCan Northern Ltd. is buying 8.7 million common units of TC PipeLines LP for US$34.57/unit, or a total of about $300 million. The investment represents 50% of the US$600 million private placement of common units by TC Pipelines. Another subsidiary of TransCanada also will invest US$12 million in TC Pipelines to maintain its general partnership interest.

The partnership will use the proceeds to partially fund its proposed $962 million acquisition of a 46.45% general partner interest in Great Lakes Gas Transmission from El Paso Corp. That transaction along with TransCanada's purchase of ANR Pipeline -- a $4.135 billion combined deal, which includes $744 million in debt -- was announced in December (see Daily GPI, Dec. 26, 2006).

TransCanada said its purchase of additional TC Pipelines units is conditioned on the closing of the Great Lakes deal, which is expected by the end of this month. On closing, subsidiaries of TransCanada will own 32% of TC Pipelines and TransCanada will continue to be the general partner. Meanwhile, TC Pipelines will boost its pipeline assets to more than 3,600 miles of federally regulated U.S. interstate gas pipelines, including Northern Border Pipeline (50%) and Tuscarora Gas Transmission (99% owned or controlled).

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