Chesapeake close to $4bn pipeline sale Chesapeake Energy, the US gas producer struggling under its debt burden, is close to a sale of pipeline assets for about $4bn that could be announced by the end of the week. The company is in talks with Global Infrastructure Partners, a private equity fund and owner of Gatwick and London City airports in the UK, over the sale, which could result in a deal in time for Chesapeake's annual meeting on Friday, according to one person familiar with the situation. Under the terms being discussed for the possible deal, GIP would pay about $2bn for Chesapeake Energy's stake in Chesapeake Midstream Partners, a separately listed pipeline company spun out in 2010, and a further $2bn for other pipeline assets held directly by the parent. The pipeline assets are the latest in a growing list of disposals planned by Chespeake as it attempts to close the gap between its ambitious capital spending plans and its diminished cash flows, hit by the fall in natural gas prices. The outlook for the company is further clouded by the falls in the price of oil and natural gas liquids, such as ethane and propane, which are used for fuels and chemical feedstocks. The company's strategy has been pinned on reducing its reliance on natural gas, which hit a 10-year low earlier this year, and adding to its production of oil and other liquids. It has in recent weeks announced the planned sales of leases covering about 900,000 acres across the US, in addition to its previous plan to sell 1.5m acres in Texas and to find a joint venture partner for 2m acres in Oklahoma. Chesapeake's pipeline assets are likely to appeal to infrastructure investors because they have guaranteed revenues. Contracts signed by the parent company commit it to $13.8bn of payments to the midstream business to pay for using its pipelines to carry gas from Chesapeake's fields. Selling the pipeline assets would also cut Chesapeake's need for capital spending by about $3bn over the next three years. On the company's own projections, its plans would have left a gap of up to $10bn between its cash flows and its spending plans for 2012 alone, with a further shortfall next year. Chesapeake's leading shareholders, Southeastern Asset Management, with 13.6 per cent, and Carl Icahn, the activist investor who has 7.6 per cent, have been urging the company to scale back its investment plans in order to strengthen its finances. It emerged this week that Chesapeake had put a package of leases covering 337,000 acres in eastern Ohio up for sale. The advisory firm working on the sale said a reason for the move was Chesapeake curbing its capital spending and scaling back its plans to develop its oilfields in the region. Concerns over Chesapeake's corporate governance came into focus in April when it emerged that Aubrey McClendon, the chairman, chief executive and co-founder of the company, had built up large debts that were not fully disclosed to the board or investors. The growing power of the two largest shareholders over Chesapeake was shown on Monday when the company announced plans to remove five directors from its board and replace them with four new ones, three nominated by Southeastern and one by Mr Icahn. The company's investor meeting at its Oklahoma City headquarters comes amid a 50 per cent fall in the share price over the past year. The company has set a deadline of June 22 to appoint its new directors and an independent chairman, but the meeting could give an indication of which directors are likely to leave. Shares in Chesapeake Energy rose 6 per cent to $17.96 in afternoon trading in New York. Those in Chesapeake Midstream were up 4 per cent at $25.04.