UPDATE 3-First Solar buys rival utility project pipeline

* First Solar buys OptiSolar pipeline for $400 mln in stock

* Deal includes 550-MW project for PG&E

* Deal includes 1.3 GW of other projects under negotiation

* First Solar will also get 136,000 acres of land rights (Adds details, CEO comments from conference call, updates share activity)

By Nichola Groom

LOS ANGELES, March 2 (Reuters) - First Solar Inc (FSLR.O) said on Monday it would pay rival OptiSolar $400 million in stock for its pipeline of solar projects, including a major installation for California utility PG&E Corp (PCG.N) and other nascent deals that will rapidly expand the company's presence in the U.S. utility market.

The deal, which First Solar Chief Executive Mike Ahearn called a "watershed acquisition" for the company, includes 1.3 gigawatts (GW) of solar development projects being negotiated with Western U.S. utilities and 136,000 acres of strategic land rights that have the potential to deploy up to 19 GW of additional solar projects.

In Southern California, one GW of electricity is enough to power up to 650,000 homes.

The addition of projects already at various stages of development will "catapult us into a whole new league," Ahearn said on a conference call to discuss the deal.