Let's Talk Pipelines!!!!

I have been approached by a pipeline company called MasonDixon, that of course is affiliated with CHK. They wish for a right of way through my property to service a pending drill site and no doubt others in the future. I have initially said no!  However, I have neighbors who will also have their chance to supply this ROW. They offerred the standard 2-page all in their favor lease with a one time $15 per ft easement payment. I have downloaded the ALOV pipeline agreement and think highly of it. Will use that as a starting point and offer it to the neighbors. Now....What I need from the listening audience is current payment levels received. This proposed 24 inch pipeline (50ft ROW) is in Columbiana County, appears headed to the new Kensington Plant. I know there has been much said about pipelines on this site, I have viewed most of it. But most is now old news and I would prefer the most current. If you are able to assist with any pertinent info it would be greatly appreciated. First hand knowledge would be great.   

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Permalink Reply by Michael Allen on June 11, 2013 at 6:38am

Here are a few things to consider:

1) If you are a landowner (LO) with production/well on your property, you want a permanent non-exclusive easement. Included in the easement should be language such as: a permanent 100' easement and payment for each pipeline as a seperate and off-set location. In other words, you are establishing a pipeline corridor. You will receive a payment for each pipeline installed plus surface damages. All of this is without eminent domain but is an advantage to the LO since it is packing their own production.

2) You are a LO that the pipeline is not taking your production and the company does not have eminent domain power, you want the following: either a pipeline lease agreement with an annual payment(know that this will be way less than a one time or 10 year payment) or a payment for a set number of years/expiration date and a renegotiated payment based upon the then-going rate or at a rate increased by the COL increase %. You can also go with a License Agreement with an annual payment as well.

3) The Company has a common carrier status and can condemn for an easement: go for more stipulations, conditions and abandonment clauses and single line with minimum easement width and work space. Strict re-veg clause and natural disaster protections.

 

Regarding the PSI question; natural gas common carrier pipelines usually operate at 900-1,000 PSI but are tested at double the operating pressures. Liquid pipelines are operated at much less PSI, around 300-600 PSI or even less depending on the product, crude, NGL, etc.

Permalink Reply by mark on June 11, 2013 at 7:26am

michael allen I understand the high pressures required it just seems odd they call that low pressure and thank-you for the breakdown of options certain landowners may have we are basically group 2 by your breakdown was just talking to FANG F.FANG the radio program from gms will have a discussion on this subject can't wait thanks for your answer

Permalink Reply by Tim Tarr on June 11, 2013 at 6:59pm

The only low pressure gas lines I know of are on the downstream side of a gas meter (regulator). It's measured in column inches of water because of small #'s (0.25 to 0.5 psig). Thats the ones that run into a house.

You may get medium pressure (150 psig max) or even high pressure into a large structure . Above 150 psig is considered high pressure.

If they say it's low pressure ask how many column inches of water? They'll say anything below 1300 psig is low.

Permalink Reply by mark on June 11, 2013 at 10:50pm

tim    thanks for some clarity in response to my question yeah there answers at best are vague strange way to start a "partnership"  LOL  

Permalink Reply by Joseph-Ohio on June 12, 2013 at 1:06am

In my opinion, it's not correct and very misleading to tag a carrier pipe / natural gas transmission line / any part of a natural gas service; as being high pressure or low pressure based on  jargon / colloquialism.

The reason I hold that opinion is because (again in my opinion) in any one individual's or company's parlance; natural gas is a 'lethal service'; and it's characteristics including line pressure ought to be described by using  understood industry standards.

A 'lethal service' is nothing to get casual about.

All once again IMHO.

   

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