Need Help with Pipeline Lease

Hello,

Last night a guy from Oxford Oil came to my house and handed me a contract to put a pipeline through my place in Guernsey County.  He acted like I should just sign it because "it would get me Christmas money." They are paying $10 a foot.  I don't know anything about piplelines....

What I want to know is, can they force me to do this?  I asked him what would happen if I said no.  He hemmed and hawed and said that they would have to go around and it would be a long way. He stated that I am the "last piece in the puzzle."

$10 a foot does not sound like it is a very good deal either.

Also, I skimmed the contract and basically it gives Oxford (or whoever) the right to have regulators, compressors, etc. on my land.

Before I go to an attorney, does anyone have anything to say about this?

Sue

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Permalink Reply by Nancy S on February 1, 2014 at 5:42am

Thank you for this link.  It is awesome.  Loads of info in it.  MarkWest is telling me they can't go near my wetlands or run the line parallel to my creek which runs north to south, but according to this document you sent me, the can go under it.   The line they want to cross my land with would run north to south like the creek does.  I just don't want it in the middle of my property. 

Permalink Reply by Billy Bob Meeker on January 31, 2014 at 3:01am

From what I've see of other pipeline installations, the pipeline companies do a pretty good job protecting water ways and wetlands.  However, keep in mind you DO NOT have to accept a pipeline if you don't want it.  And, if you do choose to accept a pipeline, you certainly have the right to tell them where you do and do not want it routed.  If they don't like your direction, tell them to hit the road.  And, you are correct, a pipeline ROW will lower your property value for a future real estate sale.

Permalink Reply by Nancy S on February 1, 2014 at 5:39am

Billy Bob, I just send you a friend request.  I see you also are located in Harrison County.

Permalink Reply by Nancy S on February 1, 2014 at 5:47am

As of right now, they are telling me they can't put it where I would want it located.  I have a creek that runs north to south near the back of my property, and the line they want to put in would also run north to south.  This is going to be a single line, I believe its called a leader line, which will run from a pad that has yet to be installed connecting it into an existing pipeline that transports to processing plants in Cadiz area.  I have a great attorney, Matt Warnock, with Bricker & Eckler out of Columbus. 

Permalink Reply by INVICTUS on February 1, 2014 at 5:55am

Nancy, are you obligated to take that line?

How do you know you are obligated?

Are you leased and in a unit that has been declared?

Many questions that need to be answered to declare your position of control in this thing. For goodness sakes, don't sign anything without that Attorney's thorough review.

FYI, I've seen well over 1000' bores under wetlands and under ponds.

Its quite possible. they just don't want to spend the money.

There are cost targets and timeline deadlines that pipeline people must meet for dealing with their customers: The developer with the Pad, in the case of gathering lines. 

There are geologic and construction restraints that can cause constructability issues. My experiences are now thus:

They want the line in as cheaply as possible and will, while acting as though the landowner has location approval, either go around the landowner via cheaper way, or, if it gets nasty, force the landowner to take the line.

So, again, we must ask the question as to what our legal obligation is to play ball with these folks. Once that is clear we can formulate a plan for dealing with the pipeline proposal. Hope this helps.

Permalink Reply by Billy Bob Meeker on February 1, 2014 at 7:02am

Keep in mind, there are only two situations  wherein you are obligated to accept a pipeline across your property.  1)  If the line is an INTERstate line, the company may have right of eminent domain.  But this does not seem to be the case in your situation.  2) If the pipeline is a connector line from a pad and your land is part of that pad's drilling unit, your lease may allow them to put a pipeline on your property to connect the pad to some other pipeline.  

As far as I know, except for these two situations, you have no obligation to accept any pipeline if you so choose.

Permalink Reply by INVICTUS on February 1, 2014 at 1:39am

First of all, The regulatory agencies are all overstressed now for qualified inspectors.

Further, the rules that govern the local, more unregulated lines (unregulated means LESS regulated or little practical oversight) are still being promulgated and defined.

Ohio EPA is nearly ineffective except for immediate spill response.

Army Corps of Engineers has federal jurisdiction over Wetlands but they are ceding much of the inspections for this to over worked state inspectors (in Ohio, Its ODNR).

I can tell you that, when you call these agencies, they will give conflicting stories as to who's authority this or that issue is.

PUCO Has authority over PIPELINE SAFETY, But only for Gas Pipes. Liquid Pipeline safety is controlled by PHMSA (Google it).

Local gathering pipelines from Pads are the least watched of the pipelines, and where, in our personal experience, are the most prone for mischief, both in terms of negotiations, as well as installation and ongoing relationships.

I am a BIG fan of O/G Development and see the process as cutting edge of technology.

But Pipeline Companies are not to dealt with lightly.

First question any landowner need to ask: Am I REQUIRED to take this line?

Nothing else should be considered first including the money which can have a powerful, overwhelming influence over one's thinking.

RUN, do not walk, to the nearing GOOD O/G Attorney With experience (Both in writing Leases & MORE importantly on litigating (read: Enforcing)) the Lease language in court.

Personal experience as well as anecdotal experience by many I've spoken with who have dealt with our new friends/partners: The Midstream people.

Permalink Reply by lance on February 2, 2014 at 2:39am

Do you know if a 20" "trunk" line is an interstate or intrastate line? And just how important is this to the company?

Permalink Reply by Mark McGrail on February 2, 2014 at 4:28am

lance,

Geberally it is an "intrastate" line.

Permalink Reply by st. croix on January 31, 2014 at 2:49am

Does anyone know if $3.00 a foot is a fair price for a temp water liner line?

Permalink Reply by lance on January 31, 2014 at 4:36am

I think I remember someone on this site saying 10.00 ft for an above ground water line... Ask around and see if there is someone on this site who has recently made a deal for the above ground water line..... Hope you get a good deal....

Permalink Reply by INVICTUS on January 31, 2014 at 4:47am

That's what CHK is paying....I wouldn't try to negotiate that one, price-wise...it's temporary, easy money with virtually no disturbance. I did one. 

But do watch them and make the broker you are dealing with walk the line and incorporate additional protections into the agreement.

Do ask for $1-$2k extra for EACH additional booster pump they install on you.

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