UPDATE 1-Williams, TransCanada propose US natgas pipeline

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NEW YORK, March 13 (Reuters) - Williams (WMB.N: Quote, Profile, Research) and TransCanada Corp (TRP.TO: Quote, Profile, Research) on Thursday said they are evaluating the development of a new natural gas transmission pipeline that would move natural gas from the Rockies to markets in the western United States.

The Sunstone Pipeline would be a 618-mile, 42-inch-diameter pipeline with capacity of up to 1.2 billion cubic feet per day, the companies said in a joint statement.

The project, proposed for service in 2011, would involve building the new line nearly parallel to Williams' existing Northwest Pipeline system between the Opal Hub in Wyoming and Stanfield, Oregon.

Williams' Northwest system interconnects at Stanfield with TransCanada's Gas Transmission Northwest pipeline system.

An open season to gauge interest in transportation on the line will begin March 17 and run through April 30.

TransCanada's GTN will hold an additional open season to offer existing capacity available on its system between Stanfield and GTN's terminus near Malin, Oregon -- near California's northern border.

The companies did not provide an early estimate on the cost of the project.

Williams, through its subsidiaries, primarily finds, produces, gathers, processes and transports natural gas. The company's operations are concentrated in the Pacific Northwest, Rocky Mountains, Gulf Coast, and Eastern U.S. Seaboard.

TransCanada's pipeline business is principally comprised of pipelines in Canada, the United States and Mexico, while its energy business includes power operations, natural gas storage and liquefied natural gas. (Reporting by Eileen Moustakis and Anna Driver, editing by Matthew Lewis)