UPDATE 2-Athabasca prices 2010's biggest North America IPO

* IPO to raise at least C$1.35 billion

* Morgan Stanley Canada Ltd and GMP Securities lead offer

* Will be Canada's largest IPO in years

(Adds further detail, background)

By Pav Jordan

TORONTO, March 30 (Reuters) - Athabasca Oil Sands Corp said on Tuesday it will raise at least C$1.35 billion ($1.32 billion) in North America's biggest initial public offering so far this year, a clear sign investor interest in Canadian oil sand assets has rebounded.

Athabasca, which is developing Alberta oil sands projects in partnership with a Chinese state oil company, said it will sell 75 million shares at C$18 each through a syndicate of underwriters led by Morgan Stanley Canada Ltd and GMP Securities.

If an overallotment option is exercised, the value of the offering could top C$1.55 billion. The deal is expected to close on April 8, and the shares will be listed on the Toronto Stock Exchange.

The Athabasca IPO originally aimed to raise about C$750 million. [ID:nN02158958]

According to Thomson Reuters data, it will be the largest initial public offering in Canada since at least 2006, topping C$1.26 billion raised by Franco-Nevada Corp (FNV.TO) in 2007 and a C$946 million IPO by Genworth MI Canada (MIC.TO) in June 2009.

Last year, Athabasca sold interests in its projects for C$1.9 billion to PetroChina (601857.SS)(0857.HK)(PTR.N), which will help pay for development.

The company has said its oil sands holdings in northern Alberta could contain as much as 7.1 billion barrels of tarry bitumen. The projects, in the MacKay River and Dover areas, could eventually produce as much as 500,000 barrels per day, AOSC has said.

The company is floating the stock just as the Canadian oil sands sector is recovering from the economic meltdown, in which C$90 billion of projects were delayed or canceled.

Numerous companies have rekindled investment plans in recent months. Still, the stock prices of many Canadian oil sand plays have remained sluggish. [.TO/O]

The re-sized Athabasca deal comes at a time when U.S. crude trades just over $82 a barrel, having held between $70-80 a barrel for much of this year after crashing to below $33 a barrel late in 2008 amid the global economic crisis. [O/R] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For stories, factboxes and video from the Reuters Canadian Oil Sands Summit click on: here (With additional reporting by Jeffrey Jones in Calgary; editing by Jeffrey Hodgson)