CALGARY, Alberta, Jan 20 (Reuters) - TransCanada Corp , Canada’s No. 2 pipeline company, said on Monday it will sell its Cancarb Ltd unit, a carbon black manufacturer, to Japan’s Tokai Carbon Co for C$190 million ($173.5 million) in order to focus on expanding its pipeline business.
Cancarb, located in Medicine Hat, Alberta, about 300 kilometers (186 miles) southeast of Calgary, is the world’s largest producer of thermal carbon black, an industrial material used in tires, printer inks and other goods. The sale includes Cancarb’s 41-megawatt power plant, which sells electricity to Medicine Hat’s power grid.
TransCanada plans to use the proceeds to fund its pipeline growth strategy, which includes the controversial Keystone XL pipeline to take oil sands crude from northern Alberta to U.S. refiners and the 1.1 million barrel per day Energy East pipeline to take Western Canadian oil to the Atlantic Coast.
“The proceeds from this sale will help fund TransCanada’s unprecedented capital growth plan that includes $38 billion in new projects to be completed by the end of the decade,” Russ Girling, TransCanada’s chief executive, said in a statement.
The sale is expected to close by the end of March.
TransCanada shares were up 38 Canadian cents at C$48.99 at midmorning on Monday on the Toronto Stock Exchange.