TransCanada's Quarterly Profit Rises to C$390 Million

By Jordan Burke

Oct. 28 (Bloomberg) -- TransCanada Corp., owner of Canada's largest pipeline system, said third-quarter profit rose 20 percent after an acquisition boosted its power business.

Net income rose to C$390 million ($303 million), or 67 cents a share, from C$324 million, or 60 cents, a year earlier, the Calgary-based company said today in a statement. Revenue fell 2.3 percent to C$2.14 billion.

The company got state approval from New York in August to buy a New York City power plant from National Grid Plc for $2.9 billion. The purchase of the 2,480-megawatt Ravenswood plant in Queens, the largest power acquisition in TransCanada's history, expanded its power-generating capacity by about 30 percent to 10,200 megawatts.


Chief Executive Officer Hal Kvisle, 56, is expanding TransCanada's power business to diversify from its natural- gas pipeline network in western Canada and take advantage of growing electricity demand.

TransCanada also is expanding into oil lines to capitalize on rising output from Alberta's oil sands. In July, TransCanada and partner ConocoPhillips said they plan to build a $7 billion expansion of the Keystone pipeline project to transport crude to U.S. Gulf Coast refineries from western Canada.

The company said today it will increase its Keystone stake to about 80 percent from 50 percent.

Keystone Financing

TransCanada said in today's statement it is ``seeking to establish further committed bank lines in support of its Keystone Pipeline construction efforts and expects these to be in place in fourth-quarter 2008.''

The 1.1 million barrel per day pipeline, which includes a 500,000 barrel per day expansion, is scheduled to start operating in 2012. Capital investment for the pipeline will total $12 billion between 2008 and 2012.

The expansion would enable processing of Alberta oil- sands output at plants on the Gulf coast that account for almost half of U.S. refining capacity.

TransCanada rose C$1.35, or 4.1 percent, to C$33.98 at 9:53 a.m. in Toronto Stock Exchange trading. The stock has dropped 16 percent this year.

Alaska to Alberta

In August, the company received approval to build a $27 billion pipeline that would carry natural gas 1,715- miles (2,744-kilometers) from Prudhoe Bay, Alaska, to the Alberta Hub in Canada and then to U.S. markets.

Natural-gas futures traded in New York averaged $8.99 per million British thermal units during the third quarter, up 44 percent from the previous year. Oil futures averaged $118.22 a barrel during the quarter, up 57 percent from the previous year.

Pipelines used to transport products including gasoline and diesel fuel accounted for 9.2 percent of the company's 2007 revenue.

(TransCanada is scheduled to hold an earnings conference call for investors and analysts at 11 a.m. New York time. To listen, go to http://www.transcanada.com.)

To contact the reporter on this story: Jordan Burke in New York at jburke29@bloomberg.net.