pipeline rates

Chesapeake wants to run a pipeline through our farm in Eastern Ohio.   What price per foot has been offered lately for pipeline right of ways....we assume gas but it could be oil as there is a gas line along the road now.   anyone have any advice?

 

much thanks in advance

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Permalink Reply by Billy Park Whyde on February 29, 2012 at 4:12pm

Amen

Permalink Reply by Augusta Farmer on March 2, 2012 at 3:56am

thanks, they are offering 10.50 per foot but only if we sign in a week....we are not really interested in that.  I'm trying to talk to my brother who owns farm with me in that in 20 years a developer may not want our property if a pipeline goes through......major money could be lost

Permalink Reply by Billy Park Whyde on March 2, 2012 at 4:13am

  Also will there be any above ground protrusions such as shut off valves line markers, exposed pipeline of a water way crossing, depth of the pipeline, will it be limited to only one pipeline , will it be allowed to expand in size.  Surface damage, timber removal value of the timber , will it go under any roadway on your property or future roadway? 

Permalink Reply by Augusta Farmer on March 2, 2012 at 4:26am

no obove ground structures or exposed pipe, 3' deep, 2 pipes(1 gas, 1 oil), top soil seperated and put back, no timber loss, did not specify future expansion.....good question....no current road just hay fields and pasture.    They will gate the pasture fence for access.    

 

Good questions!

Permalink Reply by Finnbear on March 2, 2012 at 4:57am

Depending on where you are located in the play and what infrastructure is nearby, they may need 3 pipelines, one for gas, one for oil, and one for NGL's.

Permalink Reply by Augusta Farmer on March 2, 2012 at 4:13am

That is actually what I am thinking......if the pipeline is on our border we really are not limited in developing.    The TN gas line already borders our south line....who knows if we would develope, only if my kids or grandkids someday do not want the farm.    You seem very in the know, we may counter with $20.foot.    thoughts?

 

Permalink Reply by Billy Park Whyde on March 2, 2012 at 4:19am

 Heck try $100 a foot its a forever loss of property. They can of course refuse but they may say $50 right off the bat, perhaps you might just say you'll think about it as well to let them get nervous. 

Permalink Reply by Augusta Farmer on March 2, 2012 at 4:29am

thanks so much.....I really do hate this but a necessary evil.    life is full of negotiations

Permalink Reply by Farmhouse on March 2, 2012 at 4:42am

First of all Augusta, the ole "sign in a week or the deal is off the table" is LAUGHABLE. 

Don't let the door hit ya pal! I can attest that this is a tried and true Landman/Pipeline rep tactic. I wish I had a dollar for each time I heard it. The infrastructure in OH is in it's infancy, this will be going on for years and years. My best advice is to get together with the others along the route and negotiate as a block. Highest success rate this way. Message me if you want and I can give you links to other successful negotiated ROW framework as well as other sites that are loaded with information.

The $8500 per acre that Mark quotes above is almost certainly NOT for a stand-alone pipeline ROW. More likely it is payment for "surface use and damages" in connection with a water impound, compressor site, well pad, storage area etc. that may also include necessary pipeline right of way as part of the project. For example a 10 acre compressor site obviously needs related pipeline so they offer a per acre price for surface use and damages and include the pipeline right of way in the agreement.

When negotiating pipeline ROW's they are usually talked about in terms of "per rod (16.5 feet) or even "per foot". I've not seen reference to "per acre" unless they are talking about building pipelines in connection with some of the projects listed above i.e. water impound.

In my opinion, Pipeline ROW's are the worst deal in the business for the landowner. They expect you to drop to your knees and cry "hallelujah!" for the privilege of giving away permanent, forever and ever rights to your land for a pittance like a one-time $10 or $15 per foot payment. While the pipeline company makes gazillions in transport fees. It's a joke.

On the other hand, it's a fact that Wells have been and in future will be drilled primarily along the route of the pipeline. Pipelines, water impounds, compressors etc are definitely a necessary evil. But there are ways to negotiate land-owner friendly and financially feasible agreements with the pipeline or gascos. Just don't listen to any "this deal is for today-only" garbage. And get with your neighbors!! Good Luck

Permalink Reply by Augusta Farmer on March 2, 2012 at 5:02am

thanks!    we are calling our neighbors and I also thought a one week timeline was kinda crap.  I feel much more nervous about this than I do our drill lease as it has forever implications for a one time fee....they are also trying the "chk is much less likley to work with you in unitizing if you are not working with them on pipelines ROW" which aslo ticks me off.    We have been colaborative with chk on our lease and frankly I just don't want a pipeline!

Permalink Reply by Finnbear on March 2, 2012 at 5:12am

Make them show you the proposed location of the pipeline. If it is along a border that wouldn't overly inhibit future development and you decide you can live with it, demand that the specific location be written into the agreement so they don't have carte blanche to later put it wherever they want. You are the one giving up the most here and you need to be fairly dealt with and compensated IF you agree to move forward. You don't have to move forward if you can't stomach the deal, but be aware that it may also cost you in the long run. Approach this as a partnership, through give and take from both parties to come to an agreement, and not as an us vs. them situation.

Permalink Reply by Augusta Farmer on March 2, 2012 at 5:28am

thanks, yes they have mapped out the location....hence why I am so skeptical....they are cutting the farm diagonally in half!

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