NEW YORK (MarketWatch) -- Chesapeake Energy Corp. continued its string of cash-generating transactions by agreeing to sell a 50% stake in its pipeline business to private equity fund Global Infrastructure Partners for $588 million in cash.


6040200ON09FMAMJJASChesapeake /quotes/comstock/13*!chk/quotes/nls/chk (CHK 27.60, +0.07, +0.25%) will contribute natural gas gathering and processing assets into a new entity, Chesapeake Midstream Partners, L.L.C. (CMP).

Shares of Chesapeake fell 1% to close at $27.53 on Friday.

CMP's assets will include all of its midstream assets in the Barnett Shale and also the majority of the company's non-shale midstream assets in the Arkoma, Anadarko, Delaware and Permian Basins.

J. Mike Stice, Chesapeake's senior vice president for natural gas projects, will serve as chief executive officer of CMP.

Chesapeake Energy CEO Aubrey McClendon said he hopes CMP will "become one of the largest public midstream companies in the nation."

Adebayo Ogunlesi, managing partner at Global Infrastructure Partners, said, "The future of natural gas is bright and Chesapeake brings unrivalled expertise and experience to this partnership."

The deal follows other big transactions and partnerships with Statoil Hydro /quotes/comstock/13*!sto/quotes/nls/sto (STO 22.46, +0.11, +0.49%) , Plains Exploration & Production /quotes/comstock/13*!pxp/quotes/nls/pxp (PXP 26.05, +0.13, +0.50%) and Argonaut Private Equity.

In May, Chesapeake said it's targeting the monetization of leasehold and producing properties for $1.5 - $2.0 billion in 2009 and $1 - $1.5 billion in 2010, with plans to use the proceeds for capital expenditures and to reduce borrowings under its revolving credit facility.


Buck