TransCanada, which has its headquarters in Calgary, Alberta, plans to raise 4.2 billion Canadian dollars in new equity to partly finance the transaction. RBC Dominion Securities and TD Securities will lead that financing.

Until last year, TransCanada had been focusing its expansion efforts on the oil transportation side of its business.

In addition to the collapse in oil prices, the company was hit by the decision of the Obama administration in November not to grant a permit for Keystone XL, which was intended to bring oil sands production down to refineries on the Gulf Coast in the United States.

The project became a lightning rod for American environmentalists who argued that the oil sands in Alberta were a particularly dirty source of energy. President Obama also expressed the opinion, which was rejected by the Canadian oil industry, that the project was also a way to get the oil-bearing oil sands’ bitumen from landlocked Alberta onto tankers destined for export to countries beyond the United States.

TransCanada’s backup plan for its oil sands business is an all-Canadian pipeline it calls Energy East. Based partly on converting a natural gas pipeline to Ontario and Quebec to carry oil, it would open up the oil sands to refineries in eastern Canada that now largely rely on imported oil.

If built, it would also expand the oil sands’ presence in the United States in two ways. Tankers could complete the oil’s American journey from ports in Eastern Canada. And the pipeline would service a refinery owned by privately held Irving Oil in New Brunswick, which ships a substantial portion of its gasoline production to New England.

But like Keystone XL, Energy East has become politically volatile, particularly in Quebec. That province plans to conduct its own review of the plan in additional to the federal approval process.

Some politicians and others in Western Canada are already demanding that the federal government approve Energy East if it agrees to a request from the Quebec-based Bombardier for $1 billion in assistance for its troubled program to compete directly against Boeing and Airbus in the market for airliners.