pipeline right of ways

I have been approached for various ROW agreements, some for water some to transport gas.  Thus far all have or appear to be option agreements with only a small amount paid up front ( 10 to 1000 ) to secure the right of way agreement with payment for the pipelines and damages payable after construction begins.

Is this typical?  I suspect they don't want to drop tons of cash on you only to find they have to change directions and so they sign up everyone they can for a small sum and then sort it all out later as to the actual/final pipeline route.

Generally I do not have a problem with this but I do think a timeline has to be put in or the agreement ends.  Chesapeake had such a provision, 1000 up front and then if no pipeline in one year contract terminates.  A Markwest contract reads as though it is indefinate as to when they might start digging...I'd like to see more of say 6 months or a year in there and perhaps they will agree to that if I even say yes.

Anyone with similar experieces/thoughts...

Thanks

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Replies to This Discussion

Permalink Reply by craig on September 17, 2012 at 3:29pm

In relation to gathering lines, yes it is typical to sign an option agreement and you are right about why. 

I believe i'd be pushing for an expiration date as well.

When signin, Just remember you are basically permanently losing the use of the ROW land as well as any frontage on roads, plus 100' or is it 200'. This could affect the future value of your land as well as any subdivisions.

I'm all for the pipelines, because they are needed, but I'm not for being taken advantage of.

In all seriousness, I think I'd be asking for say .0001¢ ( or some other small number) per barrel, or its equivalent that passes through the line IF it is a transmission line which I believe the MarkWest line is. Is it the 36" line they are talking about building from Butler to Vanport? 

Permalink Reply by Frank Nesmith on September 20, 2012 at 5:28am

They asked a friend of mine for a pipeline contract, but told her the pipelines would be run above ground. Is that true? Anyone know?

Permalink Reply by gary m on September 20, 2012 at 12:30pm

told me they would be under ground.

Permalink Reply by craig on September 20, 2012 at 5:28pm

The only lines that I've seen run above ground are freshwater lines that are temporary and yes they signed a contract of some sort.

Permalink Reply by ShaleAdvice (Steven C. Townsend) on September 21, 2012 at 12:46am

Gathering up the acreage was the second phase of the O&G strategy. Now the full court press will be on develping the acreage they have. Be very careful of signing pipeline agreements and right of ways. There are just as many or even more dangers in signing a right of way than an oil and gas lease.

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