I noticed that one of the negotiated items between President Biden and Kevin McCarthy was approval for remaining permits to complete the stalled Mountain Valley Pipeline project. I have been receiving royalties since 2016 from wells located in Doddridge (the amount has dropped significantly in the last 3 months). (Assuming that it is approved by Congress), does anyone know if this pipeline, once activated, will affect mineral rights owners in any way? Thanks to anyone with knowledge regarding this topic.
This should improve the royalty that you receive for a little while. One of the main issues we have here in the Appalachian basin is takeaway capacity–pipelines. We’re producing enough gas to pretty well fill up the existing pipelines. MVP will increase capacity by about 2 billion cubic feet per day. The entire basin has somewhere between 24 and 36 Bcfs of capacity. I’m having trouble finding numbers just for West Virginia, but I think we’re at about 12-15 Bcf/day. Someone else chime in if you have better numbers than I do. Since all those pipelines are filled, Appalachian producers have to pay a higher price to ship their product to market. Since they pay a higher price, you get a little less royalty money.
Having some extra pipeline capacity will be nice, but not life changing. Once the MVP is complete, producers will drill a few more wells each per year, and that will take us back to being constrained by pipeline capacity again.
1 Like
Thank you, Kyle, for your reply! We sure appreciate it!
This topic was automatically closed after 90 days. New replies are no longer allowed.