What would you do in this pipeline ROW situation?

If you had a pipeline ROW crossing your land, that after you signed the agreement, you weren't happy with the terms, but you couldn't do anything about it. Now, the same company wants to widen the ROW to add more lines and they want you to sign another agreement. They really need your land and there's no way around you. Eminent domain doesn't apply to the situation. Would you tell them you want to amend the original agreement before you proceed with the new one? Would you use the situation and hold out until you got the money you wanted? To me, it would be the "perfect storm" to get what you want. The original deal was an agreed upon contract, but I know the wheeling and dealing that's done within this industry. A contract/agreement can be changed and modified years after it was signed.

Views: 985

▶ Reply to This

Replies to This Discussion

Permalink Reply by Joe Bezel on December 4, 2015 at 5:51pm

Zach, I think we'll need a little more information. Is it a gathering line or a transmission line? Is the first pipeline in the ground already, or is it proposed?  Have you received payment?   I would think your question would depend on what terms you want changed. If you are unhappy with the payment you received, you could simply tell the landman that they made out the first time, now it's your turn. Take what you didn't get on the first line and add it to what you want for the second line.  If the terms you didn't get for the first line are addendums you want to protect your land, I don't see any reason they can't be added retroactively.  You are correct; you are in the drivers seat in these negotiations.  Believe me, they won't want to reroute around you, so they will probably be willing to work something out. It would be a good idea to have an experienced attorney on board.  It will be money well spent.

Permalink Reply by Zack Jameson on December 4, 2015 at 9:14pm

They are gathering lines. All lines are in the original ROW, 4 or 5 lines. They want to widen the ROW to add more lines. There is no way around me. I would like to have a payment for the original ROW to cover what I want and then we can proceed with the "new" ROW. If I would add price per foot money onto the lines in the new ROW to cover what I didn't get in the original agreement, then the amount would be high. The only way I would make out that way was if 4 or 5 lines were put in the new ROW. If only 1 or 2 new lines were installed, then I wouldn't get what I want. I'll hold out until they decide and I get what I want, or there will be no new lines. (If I got $125 per foot for the new lines, I would have to have at least $225 per foot to get the money I want and again, there would have to be 4 or 5 new lines put in). The reason for the added lines, is because more wells are going to be drilled in the area and they have to move the product. It's all funneled through my property.

Permalink Reply by Zack Jameson on December 4, 2015 at 9:22pm

I've heard about a landowner who wanted $300 per foot for pipeline. The company refused at first, but several months later they contacted the landowner again and gave him what he wanted. They had no choice. I'll do the same.

Permalink Reply by Joe Bezel on December 5, 2015 at 4:44pm

I've heard about landowners who have done that, too.  You are in a great position.  If the situation was reversed, they would not hesitate to squeeze you. Good luck to you!

Permalink Reply by Zack Jameson on December 5, 2015 at 5:13pm

Thank you, Joe!!! I've experienced how these companies operate. It's seems to be all about who has the upper hand, so to speak. It's just the way it is in this industry. I won't settle with them until I get what I want. I've made out well on royalties and other pipeline deals thus far, so it's not like I'm desperate to settle with them. I know it's eventually going to happen because they have no choice. If it never happens....I couldn't care less.

Permalink Reply by Tusc-county-man on December 5, 2015 at 1:36am
Couldn't they run larger lines in original ROW if pushed too hard
Permalink Reply by Michael Allen on December 7, 2015 at 7:52am

Yours is not an unusual situation and a perfect time to re-do the entire document to include language you want, especially now since you are "experienced". Part of the new document should include a "reconveyance" of the old document and the title of your new document should be " Corrected Easement Agreement" or according to the original document title.  The old document should be completely disolved and the new document would include some of the original language, but would, more importantly, include all of the new sections/stipulations you are wanting. You need an attorney that knows how to do this and have the document ready for the company before you let them know what you are planning. Once the new document is completed to your satisfaction, then you spring it on the company. They may want to tweak the language some, but the basic changes you want must stay. Keep us posted.

Permalink Reply by st. croix on December 7, 2015 at 1:51pm
How about getting in touch with a competent oil and gas attorney for starters?
Permalink Reply by Christian E. Turak on December 7, 2015 at 8:54pm

You're running into the same situation I see with many of my clients.  Fool me once, shame on you.  Fool me twice, shame on me.

As you wrote, it's all about the leverage that you have.  If they need your property, then they're going to pay for it.  However, that's easier said than done and it's not as simple as demanding a price and not accepting a penny less.  The pipeline companies are always working alternate routes.  They're constantly shuffling different projects and throwing in the towels on some that they can't get done or lost funding for.  On the other hand, you might get $125/ft. but not for each pipeline.  Or you might get $125/ft./disturbance and they install several lines at once.  Or you get $125/ft./pipeline but you won't see a dime of it for years because they weren't willing to offer anything substantial upfront.  Or they can just dig up the ones they have already and replace them with larger capacity pipes if that's what they need. 

At the end of the day, you might get them up to $115/ft./pipeline, but they have an alternate route that will be less expensive if you want a penny over that.  

The old agreement is history--use it as bargaining leverage to get the premium deal on the new one.  And "premium" will be determined by what kind of leverage you ultimately have.  And, just because you sign a deal at $125/ft., it's not necessarily a good deal if you don't see real money, real quick or they have the right to install pipelines decades down the road and are tearing up your property every five years in the meantime.  These deals are complex.  I deal with them everyday, and it's always something new.  

Permalink Reply by dennis elias on December 11, 2015 at 3:07am

Hello Zack ...was reading your situations ...I think you are in a good positions to receive your demands . Yes ! I would ask about adding addendums to the first contract . Also I would deal with in divisional pipe line  ( per line ) . Are you talking about $300.00 per foot for the additional pipes or $300.00 per line . Here something to think about . This is what we did ; when all of this gas and oil is depleted ! than all of the rights everything goes back to the land owner and the contract becomes void. One other thing we added . ( they ) the company cannot use the pipelines for anything else ! for example , Who knows what the future holds. In our contract you cannot use these line for sewage or etc , etc. Something else to think about ,,,, make sure you have in your contract over land ( temporary ) water lines for usages DOLLARS PER FOOT  . Good Luck .      

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service