April 10 (Reuters) – Penn Virginia Resource Partners LP
said it will buy pipeline company Chief Gathering LLC
for $1 billion to expand its transportation business in the
gas-rich Marcellus Shale.
Oil and gas production from shale formations in the United
States has surged in the recent years, with companies scrambling
to build infrastructure despite decade-low prices for natural
gas.
Chief Gathering has six natural gas gathering systems
serving over 300,000 acres in Pennsylvania and West Virginia
that form part of the Marcellus Shale, one of the largest gas
fields discovered in the United States.
Radnor, Pennsylvania-based Penn Virginia expects its
midstream business unit to account for almost 75 percent of its
earnings before interest, taxes, depreciation and amortization
(EBITDA) by the end of 2013, up from 40 percent to 45 percent
currently.
Apart from natural gas gathering and processing businesses,
Penn Virginia also manages coal properties.
The company, which expects to close the deal in the second
quarter, will fund the purchase through a combination of
committed equity and debt.
Chief Gathering is owned by Chief E&D; Holdings LP.
