Chesapeake Midstream Partners LP plans initial public offering of up to $345 million

Chesapeake Midstream Partners plans $345M IPO

NEW YORK — Chesapeake Midstream Partners LP said Tuesday it is planning an initial public offering of up to $345 million.

The Oklahoma City company is a limited partnership formed by natural gas producer Chesapeake Energy Corp. and Global Infrastructure Partners, an investment fund founded by Credit Suisse and General Electric Co.

Chesapeake Midstream develops and operates natural gas infrastructure, such as pipelines, in Texas’ Barnett Shale, a major source of U.S. natural gas, as well as other fields in the Midwest.

The company did not state IPO terms or an expected trading debut date.

Energy companies have been jockeying to build natural gas production. The cleaner-burning fuel plays a growing role in powering U.S. homes and businesses.

Chesapeake Midstream says its assets gathered 1.5 billion cubic feet of natural gas a day for the nine months ended Sept. 30, making it one of the largest players in the field.

It is heavily dependent on Chesapeake Energy for its business, with 98 percent of the natural gas volumes in its pipelines and infrastructure coming from Chesapeake and its partners in the first nine months of 2009.

In the nine months ended Sept. 30, Chesapeake Midstream said it lost $17.4 million, compared to a profit of $165.9 million in the first nine months of 2008. Revenue rose 53 percent to $358.9 million.

The company plans to use proceeds to repay borrowing from its credit facility and fund capital expenditures in the future and for working capital.

In its regulatory filing with the Securities and Exchange Commission, Chesapeake Midstream said had about $32 million outstanding under its revolving credit facility.

The company plans to trade on the New York Stock Exchange under the symbol “CHM.”

Citigroup and Morgan Stanley are the lead underwriters.