Chesapeake Forms $1 Billion Fund to Boost Natural-Gas Demand

Chesapeake Energy Corp., the most-active U.S. natural-gas driller, will form a $1 billion fund to invest in companies that develop infrastructure or technology to increase the use of gas as a motor fuel.

For the fund’s initial investments, Chesapeake will spend $155 million to buy half of closely held Sundrop Fuels Inc., which plans to build a plant to convert gas and waste products into motor fuel, the Oklahoma City-based company said in a statement today. The plant is expected to open in 2013 with a capacity of 40 million gallons of fuel a year.