* Partnership to seek new gas-fired projects in Canada
* Pact set up to speed growth, spread risk
* Net income up 12 percent to C$0.24 a share in quarter
* Shares up 2.7 pct to C$15.63
By Jeffrey Jones and Bhaswati Mukhopadhyay
Oct 26 (Reuters) - TransAlta Corp said Friday it was teaming up with Warren Buffett's power generation and pipeline company to seek opportunities for new gas-fired electricity plants to power the booming Alberta oil sands and nascent Pacific Coast LNG export industries.
TransAlta, known for Canadian and U.S. coal, gas and renewable generation businesses, said it signed a strategic partnership with MidAmerican Energy Holdings Co., owned by Buffett's Berkshire Hathaway Inc.
The pair will seek out prospects to build and operate plants to help meet an estimated C$200 billion of new investment in generation that Canada needs over the next two decades.
The tie-up will allow the Calgary-based power generator to speed up its growth ambitions, as the financial risk would be shared. It announced the partnership, MidAmerican's first foray into Canada, while reporting that third-quarter profit grew 12 percent on lower maintenance costs and strong margins in most of its operations.
One example of a plant that the companies could develop would be TransAlta's 800 megawatt Sundance 7 project in Alberta, which under current plans, would be completed by 2016 or 2017.
"This gives us the opportunity to be much more aggressive here in the short-term about projects that we think are possible, and also be much more aggressive about larger projects," TransAlta Chief Executive Dawn Farrell said.
She said the oil sands sector, where producers seek to double production to 3.1 million barrels a day by 2020, offers big generation opportunities. In addition, at least five proposed liquefied natural gas export terminals on the West Coast will also require electricity, Farrell said.
TransAlta and MidAmerican already have a long-standing relationship in the United States, where they jointly operate renewable and other generation businesses.
TransAlta shares were up 41 Canadian cents, or 2.7 percent, at C$15.63 on the Toronto Stock Exchange in afternoon trading.
The stock has fallen 27 percent since the start of 2012 on concern weak power markets and higher-than-expected spending might force the company to reduce its dividend.
Farrell has said the company has the financial resources to meet its obligations and maintain its 29-Canadian-cents-a-share quarterly payout, which it did on Friday.
In the third quarter, TransAlta earned C$56 million, or 24 Canadian cents a share, up from C$50 million, or 22 Canadian cents a share, a year earlier.
Excluding unusual items, earnings were 18 Canadian cents per share, which lagged the average estimate of analysts of 23 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Revenue fell nearly 15 percent to C$538 million.
The company said results were constrained by a loss in its energy trading business and lower power prices in the Alberta and Pacific Northwest. Lower natural gas prices have brought power prices down to 10-year lows in several regions.
Farrell told analysts she expects power prices in the U.S. Pacific Northwest region to improve with a recent climb in U.S. gas prices, but warned that Alberta pricing will likely remain weak, with the return to service of TransAlta's Sundance 1 and 2 coal-fired units after the company was forced by regulators to rebuild them.
Meanwhile, the company said its 68 MW New Richmond wind farm in Quebec, which had been expected to be completed by the end of this year, is now set to start up in March, partly due to problems with contract labor and the availability of cranes