TransCanada Corp. agreed to sell its remaining 30% interest in Bison Pipeline LLC to its MLP TC PipeLines LP (TCP), TransCanada announced on Oct. 1. The sale is expected to close the same day, with a purchase price of US$ 215 million in cash proceeds.

“The Bison transaction advances our previously stated commitment to sell the remainder of TransCanada’s U.S. natural gas pipeline assets to the partnership,” said Russ Girling, TransCanada’s president and CEO. “We intend to drop down the remainder of those assets on a more sizeable, frequent basis over the coming quarters and years. This will provide TransCanada with significant cash proceeds to help fund our capital program and enhance the size and diversity of the partnership’s asset base, positioning it with visible, high quality future growth.”

The Bison Pipeline is a 487-kilometer (303-mile) gas pipeline that connects Rocky Mountain gas supply to downstream markets through the Northern Border Pipeline system. The pipeline entered service in January 2011.

Remaining U.S. natural gas pipeline assets available to be sold into TCP include:

  • 30% interest in the Gas Transmission Northwest system;
  • 44.5% and 61.7% interest in Iroquois and Portland, respectively; and
  • 100% and 53.6% interest in ANR Pipeline Co. and Great Lakes Gas Transmission system, respectively.

Including the Bison transaction, these assets are expected to generate US$500 million of EBITDA in 2016 and beyond.

In August, TCP began an at-the-market unit issuance program, which will give it the ability to raise equity of up to US$200 million on a continuous basis. Management for TransCanada believes TCP can complete dropdowns of more than US$1 billion per year going forward.

TransCanada, through its subsidiaries, currently holds a 28% interest in TCP, a U.S. MLP, which was formed to acquire, own and participate in the management of U.S. gas pipelines and related assets.