Chesapeake Energy sells midstream compression assets for $520M

Source: Columbus Business First

Chesapeake Energy Corp. has sold its midstream compression assets for $520 million.

Chesapeake, the second-largest natural gas producer in the U.S. and the most-active driller in Ohio’s Utica shale play, sold 437 compression units to Access Midstream Partners LP and Exterran Partners LP, the company announced Friday.

Access Midstream Partners of Oklahoma City, Okla. is acquiring 103 compression units from Chesapeake for $160 million. Those units will be in the Utica and Marcellus shale regions of Ohio, Pennsylvania and West Virginia.

Houston-based Extrerran Partners is purchasing the rest of the 334 units for $360 million. Those are for the plays in the Southwest, including Texas, Oklahoma and Louisiana.

Compression units are an important part of the natural-gas transportation system. Gas must be pressurized when it travels through interstate pipelines to ensure it flows optimally. Because geographic differences and friction periodically slow down gas,compressor units are placed about 40 to 70 miles apart along pipelines.

Chesapeake (NYSE:CHK) is in the midst of a makeover, shedding its non-core assets including its midstream operations. The Oklahoma City company earlier this week said itintended to sell its huge, $2.5 billion oil field services division that deals with fracking, fluid disposal and rig relocation.