TransCanada boosts Keystone stake, profit rises

TransCanada Corp. said Tuesday it has boosted its stake in the planned $12 billion Keystone pipeline by nearly 30 percent and expects to have new bank credit lines in place by yearend to pay for its construction despite the global credit crunch .

The company, Canada's biggest pipeline operator, reported a 20 percent hike in third quarter profit Tuesday and said it had agreed to cut U.S. oil major ConocoPhillips' interest in the Keystone oil export project to 20.1 percent.

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TransCanada has taken a larger stake in the Keystone pipeline.

The two companies had been equal partners in the planned line to take oil sands crude to the U.S. Midwest and Gulf Coast.

Keystone's first phase, a $5.2 billion a 590,000 barrel per day line to Illinois and Oklahoma, is expected to be in service next year. A second $7 billion phase will carry an additional 500,000 barrels to refineries on the Gulf Coast.

TransCanada said it has given some shippers the option to take up to a 15 percent stake in the Keystone project, which would cut its ownership in the line to 64.99 percent if the offer was taken up.

The company, known for its Canadian natural gas pipeline network and growing electricity operations, said it is looking to establish new bank credit lines to pay for Keystone's construction. It expects to have them in place by yearend despite the tightening conditions spurred by the credit crunch and global financial turmoil.

It said it currently has undrawn credit lines of C$2 billion and $300 million and has had no problem tapping the commercial paper market.

TransCanada also plans to issue a $3 billion debt shelf prospectus to replace a $2.5 billion debt shelf it said had been exhausted.

The company's third-quarter profit rose 20 percent on new power generation capacity and an increased contribution from its U.S. pipeline business.

TransCanada earned C$390 million ($303 million), or 67 Canadian cents a share, up from a year-earlier C$324 million, or 60 Canadian cents.

Comparable earnings, which exclude most one-time gains and losses, rose 18 percent to C$366 million, or 63 Canadian cents a share, from a year-earlier C$309 million, or 57 Canadian cents.

The comparable result beat the average forecast of analysts for 54 Canadian cents a share, according to a Reuters Estimates.

Revenue was C$2.14 billion, down 2.3 percent from C$2.19 billion.

The company said its quarterly results were helped by its larger power-generation portfolio, including the Ravenswood generating station in New York City acquired earlier this year for $2.9 billion. As well, earnings rose on its ANR pipeline network in the United States.

TransCanada shares rose 43 Canadian cents to C$33.06 midmorning  Tuesday on the Toronto Stock Exchange. The shares have fallen 15 percent over the past year.