Penn Virginia to Pay $1 Billion for Pipeline Operator

By KRISTIN JONES And NATHALIE TADENA April 10, 2012, 5:33 p.m. ET

Penn Virginia Resource Partners LP PVR +10.38% has agreed to acquire pipeline company Chief Gathering LLC in a $1 billion deal that would expand the energy-exploration company's pipeline system in the natural gas-rich Marcellus Shale region.

The move is the latest in a string of pipeline transactions aimed at capitalizing on the North American energy boom by providing key infrastructure to move all the new production to market. It comes despite low natural-gas prices, which recently fell to a decade-low below $2.40 per million British thermal units.

The Marcellus Shale formation, which stretches beneath parts of Pennsylvania, New York, and Ohio and most of West Virginia, is one of a handful of areas in North America that have helped spark a boom in the oil and gas industry in recent years. In March, Williams Partners LP WPZ -0.86% agreed to acquire gas handler Caiman Eastern Midstream LLC for about $2.5 billion, which helped to expand William's footprint in Marcellus Shale.

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