PRICE / ROD FOR 12" HIGH PRESSURE GAS LINE

General Mineral Rights Discussion
1

I AM PRESENTLY WORKING WITH A COMPANY FOR A 12" HIGH PRESSURE GAS LINE ON MY LAND. THEY ALSO WISH TO HAVE THE OPTION TO INSTALL A SECOND LINE IN THE FUTURE WITHIN THE SAME EASEMENT AREA. I HAVE LOOKED AT THE UNIVERSITY OF TEXAS DAMAGE SCHEDULE OF 2016 FOR NON UNIVERSITY LANDS AND FOUND COSTS THAT ARE NEGOCIABLE AND ARE FOR 10 YEARS AND RENEWAL RATES FOR 10 YEARS. HOWEVER THE PIPE COMPANY WANT A PERPETUAL EASEMENT. WHAT ARE THE NORMAL GOING RATES. THANKS JOHN

2

No ROW should be perpetual. You can agree to a ROW for a single 12 inch pipeline until abandonment. Replacement limited to same size. You can ask three times the rate. As far as the option for a second line, you need to be paid three times the rate listed at that time, but not less than the current payment, for a line the same or smaller size. For the line to be replaced by a larger size would require an additional payment. The UT damage schedule is updated every year and you should have the 2017 schedule.

3

John,

There is much more than price to consider. The subjects of ROW maintenance and abandoned pipeline removal with land restoration and any needed environmental remediation should be addressed in any pipeline ROW agreement negotiations. E.g.: Once a pipeline is deemed/classified abandoned by the TRRC then within a specified period of time after that classification the pipeline should be removed and the ROW easement restored and should revert back to the landowner so there will be no title clouding issue later on. Who pays for all that to happen? That should be in the contract, too.

Some other items to consider during ROW negotiations are in the following article:

https://pgjonline.com/magazine/2009/october-2009-vol-236-no-10/feat...

Here is the link to the home page of Pipeline Equities where other articles can be found.

http://www.pipelineequities.com/index.php

Such as:

There are other articles on their website not listed here.

IMO, having experienced advice and representation is not optional!

Happy Negotiations.

4

Another good reference point is the Texas A&M Real Estate group page. They have a number of good articles about pipeline and oil and gas leases, etc. There is also a Texas Land & MIneral Owner's pipeline easement agreement to mark up. I use a pretty extensive agreement that is usually agreed to, and my lands are in west Texas. I have been negotiating rates of $200 to $400/rod, but for perpetual, unless abandoned for 18 months. I do perpetual because I am old and don't want to keep a calendar of every 10 years for the many pipeline agreements on my lands.

5

THANKS FOR INFO. I WILL CHECK UT SCHEDULE FOR 2017. I PRESENTLY HAVE 2016. ON SECOND LINE, I WILL NOTE THAT THE SIZE CAN NOT EXCEED A CERTAIN SIZE. THEY ARE ASKING TO PUT NEW LINE IN SAME PHYSICAL EASEMENT. WHAT RATE SCHEDULE HANDLES THIS OR MAYBE ON 2ND LINE WORK OFF RENEWAL RATES SINCE IN SAME EASEMENT AREA. WHEN YOU SAY 3 TIMES RATE FOR 1ST LINE IS THAT 3 X $/ROD FOR NEW LINE. SO IF 12" LINE IS 120 THEN 360/ROD FOR PERPITUITY MEANING ABONDONMENT. THEN HOW IS SECOND LINE IN SAME EASEMENT? WE ARE TALKING OVER 150 RODS

6

THANKS FOR INFO. I ALSO AM OLDER SO A PERPETUAL IS BETTER FOR ME. I WILL VERIFY EXTRA LANGUAGE IS INSTALLED ON INSURANCE AND OTHER ISSUES.

JOHN