UPDATE 1-KIC, CIC, Temasek to invest in Chesapeake stake

* Chesapeake to issue $900 mln convertible preferred stock

* CIC, Temasek to join stake investment in Chesapeake

* KIC sees higher gas prices on BP oil spill, clean energy (Adds more details and quotes)

SEOUL, June 21 (Reuters) - Korea Investment Corp (KIC) said on Monday it would invest $200 million in Chesapeake Energy Co CHK.N as the U.S. No.2 natural gas company was set to issue $900 million worth of convertible preferred stock.

China Investment Corp (CIC) and Singapore state investor Temasek Holdings [TEM.UL] would also take stakes in Chesapeake, although the exact investment amount was not disclosed, KIC said in a statement.

The statement said the investment would bring stable annual dividend income of 5.75 percent, and additional income if higher gas prices helped Chesapeake’s share price strengthen, and KIC converted its holding into common stock at the agreed $27 per share.

Chesapeake shares closed at $24.61 on Friday.

"We made the investment decision because the long-term gas price outlook is bright on a global push for clean energy and expectations of less deep-sea water drilling in the Gulf of Mexico after BP's BP.LBP.N oil spill," the KIC statement said.

KIC, set up in 2005 to enhance sovereign wealth and help managing assets entrusted by the government and the Bank of Korea, also said in the statement that higher gas prices were projected because of relatively low gas prices against crude oil resulting from unbalanced supply and demand.

A month earlier, Chesapeake had issued $1.7 billion worth of convertible preferred stock under the same conditions, with U.S. institutional investors taking $1.1 billion and Asian institutional investors the remainder, it said.

A consortium of KIC and CIC had considered taking a stake in Chesapeake, local media said last month, while a KIC spokesman said no decision had been made on an investment or an investment amount, since the firm had received an investment offer. [ID:nTOE64J086]

Chesapeake said in May that it expected to receive at least $2 billion from the sale of a stake in its Marcellus Shale properties as part of its latest plan to raise cash. [ID:nN11178833] (Reporting by Cho Mee-young; Editing by Chris Lewis)