By Corrie Driebusch 

Shares of Rice Midstream Partners LP, a master limited partnership spun out of Rice Energy, opened at $15.79, 4.3% below their initial public offering price Wednesday.

The stock recently traded at $16.17 on the New York Stock Exchange, 2% below its IPO price of $16.50 a share.

The deal raised $412.5 million by selling 25 million shares, before taking into account the overallotment option, which gives underwriters the opportunity to sell additional shares under certain circumstances. The company had been looking to sell 25 million shares in the range of $19 to $21 a share, according to a regulatory filing.

Rice Midstream operates midstream assets in the Appalachian Basin, and its revenues come from natural-gas gathering services and compression services. Natural-gas futures have declined in recent weeks, though their declines are nothing like the hit the price of crude oil has taken.

MLPs, publicly traded entities that don't pay corporate-income taxes, pass the majority of their income to shareholders. This year investors have poured money into newly issued MLPs, drawn by the reputation of the partnerships for stable, high payouts and as a way to benefit from the natural gas and energy infrastructure boom taking place in the U.S.

However, even though most MLPs earn money by charging oil-and-gas producers to transport or store their products and have relatively little direct commodity price exposure, the sector has been hit in recent trading sessions as the price of oil has tumbled.

The NYSE Alerian MLP index is down nearly 12% so far this month as of Tuesday's market close, putting it well into negative territory for the year.

The Rice Midstream deal was led by Barclays, Citigroup, Wells Fargo Securities, Goldman Sachs and RBC Capital Markets.

Write to Corrie Driebusch at corrie.driebusch@wsj.com

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