TransCanada to buy National Grid plant for $2.9 bln

(All dollar figures U.S.)

NEW YORK, March 31 (Reuters) - TransCanada Corp (TRP.TO: Quote, Profile, Research, Stock Buzz), a North America energy pipeline company expanding its power generation business, on Monday said it agreed to buy a large New York City power plant from British utility company National Grid Plc for $2.8 billion, plus other adjustments at closing.

TransCanada will acquire the KeySpan-Ravenswood Generation Station, which has 2,480 megawatts of generating capacity. The purchase, which National Grid estimated would total $2.9 billion, will reduce TransCanada earnings for the first two years but boost profit thereafter.

The deal is expected to be completed this summer. National Grid, which is divesting the plant as part of its takeover of New York utility company KeySpan, said proceeds will be used for general corporate purposes.

The sale will generate a gain for National Grid, which said KeySpan had recorded a carrying value of $1.2 billion for the plant. Existing power plants that serve New York City are considered valuable since it is difficult to build new plants in the densely developed region and demand for power is always high. (Reporting by Joseph A. Giannone; Editing by Gary Hill)