05/15/2013 04:20 EDT | Updated 07/15/2013 05:12 EDT

TransCanada sells 45 per cent stake in two U.S. pipelines for $1.05 billion

CALGARY - TransCanada Corp. (TSX:TRP) is selling a 45 per cent stake in two natural gas pipelines to its U.S. subsidiary for $1.05 billion.

The deal with TC Pipelines LP, one-third owned by TransCanada, involves the Bison and GTN pipelines.

The sale is expected to close in July.

The Bison pipeline connects gas from the U.S. Rocky Mountain region to TransCanada's Northern Border system in North Dakota.

GTN moves Western Canadian and Rocky Mountain gas to the Western United States.

TransCanada CEO Russ Girling says the proceeds from the sale will help fund TransCanada's capital program, which includes $26 billion in commercially secured projects.

"The transaction demonstrates one of the many funding options available to TransCanada to finance our current capital commitments," he said.

The sale will allow the partnership to grow its earnings, cash flow and payout to investors, Girling added.

"The possibility of selling further interests in our mature U.S. natural gas pipeline assets, through a series of dropdowns, provides us with a significant amount of financial flexibility," he said.