PIPELINE R.O.W.

I have been dealing with MarkWest about a pipeline ROW... For a while now... I like the idea of helping with the oil and gas infrastructure but with this deal my land would be tied up for 3 years. They have 3 years to build the pipeline or forfeit the agreement. In this unique situation the original rt. goes across a neighbor who is hesitant to let the pipeline come thru but has recently agreed to talk with them... I was the alternative rt. around this neighbor... So, should I sign an agreement giving them 3 years to do something or should I not sign and keep my land freed up for potentially another outfit to build a pipeline?  Lance  

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Permalink Reply by Philip Brutz on February 28, 2014 at 9:09am

Are they paying you for the 3 year option?

Permalink Reply by lance on February 28, 2014 at 9:31am

What is the 3 year option? No one told me about any 3 year option...

Permalink Reply by Philip Brutz on February 28, 2014 at 9:53am

You said that MarkWest had 3 years to build the pipeline or forfeit the agreement.  Are they paying you for the 3 years even if they do not build the pipeline?

Permalink Reply by lance on February 28, 2014 at 9:57am

Not that I am aware... My Lawyer should have known about that I was not informed... I will only be paid if they construct on my property... That's all I know.... What would they pay for the 3 years of for.... IF they don't build it... I'm confused 

Permalink Reply by Philip Brutz on February 28, 2014 at 10:04am

If they tie up your land for 3 years you should be compensated.

Permalink Reply by Mark McGrail on February 28, 2014 at 10:16am

lance,

That type of ROW is only an option.

You don't get paid unless the company uses the ROW.

Permalink Reply by Busy Bee on February 28, 2014 at 9:54am
Don't give them 3 years to make up their minds. I would tell them 6 months and if they haven't figured out what they are doing then tell them to come back when they know for sure .
Permalink Reply by lance on February 28, 2014 at 10:24am

I've decided not to sign unless I know for sure they will use my land for the ROW... If not I'm bound and no one else can use it for 3 years... Not wise to sign at this time unless they are gonna use me....

Permalink Reply by Josh Willis on February 28, 2014 at 1:19pm

MW had us sign a 1 year option agreement with them paying 1/2 of first line because they were dealing with a few issues but wanted to firm up ROW. Of course 2 months later they exercised the option, paid us the remaining half and full payment on second line.

Permalink Reply by lance on March 1, 2014 at 2:12am

I tried to get 10% down and they refused... And their offer was half of what I heard others are getting... So I guess I'll have to wait and see what happens with the other neighbor. If they can't deal with her they will come back to me and try to work something out....  

Permalink Reply by Joe Bezel on February 28, 2014 at 6:26pm

It's not unreasonable to ask for something in return for the option.  Nothing in this business is for free.  For example, when MW approached you with this, you had to consult with your attorney for legal advice.  I'm sure your attorney will bill you for his time.  This is an expense you incurred because MW made you this offer.  You should at the very least not go into the red for doing them the favor of granting them an option on your land.

Permalink Reply by lance on March 1, 2014 at 2:13am

My attorney won't bill me til and if I get paid... So I'm covered there...

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