Columbiana County Pipeline

This site has been very helpful in educating landowners about shale drilling and leasing.....Lately I have seen some discussion on pipelines and ROWs but not a great deal of information ...it appears this is the next new horizon where we can help each other out.  

Today an agent for a broker in New Philadelphia...William C Abel...knocked on my door talking about the pipeline that is going to be built from the East Palestine area to Hannoverton.   Negotiations have been going on since March and it seems most of the agreements needed have been signed.   The only reason he was here was because they have moved the planned route and it now includes my property....and they are planning to walk the route starting tomorrow and rightly so...he realized he needed to talk to me first.

This is the same line that includes the county lands recently signed which was in the Mourning Journal and posted here.   I know this because the agent mentioned it...noting they paid them $12 a foot.....what he would be offering me if they decide to use the amended route...and I agreed.

I see from a message sent out to those who are members of this list that someone else was also approached recently.   

While tbere has been a bit of discussion regarding pipelines...I dont recall much back in March when surely folks were being approached... i see this like gas leasing...lets come out of the closet on this and not play into the hands of these agents who are like landmen and would prefer we dont talk to each other.

I did check out the agreement posted on the ALOV site....it looks pretty good and a better alternative to what I am sure the form agreement is that these agents offer first.   I would appreciate any comments on what you guys think of tge provisions included.

Company building the pipeline is Cardinal Gas Services....he admitted, yes a subsidiary of Cheasapeake....saving they are from Canton, Oh.....A little slippery like a landman....telling me what he thinks I want to hear...bending the truth...as Chk does have an office there.

The agent and I didnt talk seriously yet... I asked him basic prices he was talking and he quoted the $12 like the county paid.   I asked about pipe depth and he said 3 feet...while I countered that 4 seemed more reasonable and matched what I have in my gas lease.

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Replies to This Discussion

Permalink Reply by Indiana Smith on July 12, 2012 at 1:26am

They cannot use eminent domain for gathering lines.  Here is another good article from WV:  http://www.wvsoro.org/resources/advice/Pipelines_What_Surface_Owner...

Permalink Reply by Utica Shale on July 12, 2012 at 2:25am

And CBC / Cardinal Gas Services has one, maybe two, current projects in Carroll County now ...

http://gomarcellusshale.com/group/carrollcountyohio/forum/topics/ga...

Permalink Reply by Bob Guehl on July 12, 2012 at 3:21am

Be aware that other companies are starting to develop pipelines in the area - as usual, CHK is in early with subsidiary shell companies, further insulated by "agents" and independent contractors (landmen). $15 per linear foot seems to be their standard - "non-negotiable." Any higher? ALOV is a good place to start. 

Here's the Yo. Biz Journal article from today: 

Caiman Energy, its Partners to Invest $800M in Utica

Thursday, July 12, 2012

YOUNGSTOWN, Ohio -- More midstream infrastructure is on its way to eastern Ohio’s Utica Shale region as Caiman Energy II secures $800 million in investments to develop a natural gas liquid and crude oil gathering and processing network.

Caiman’s partners include Williams Partners of Tulsa, Okla., EnCap Flatrock Midstream of San Antonio and Highstar Capital of New York. The area of focus will be the natural gas liquid- and oil-rich areas of the Utica Shale in Ohio and northwest Pennsylvania, the company said.

In announcing the joint venture venture, Caiman did not narrow down where it would the build pipelines and plants, nor offer a timetable for site development and construction.

Caiman’s announcement follows news Monday that NiSource Inc., parent of Columbia Gas of Ohio, and Hilcorp Energy will invest $300 million to build a natural-gas liquids processing plant in northeast Ohio and another 50 miles of pipeline infrastructure in the Utica region (READ STORY).

Caiman, founded in 2009, built a rich gas system in West Virginia’s Marcellus shale region. In April the company sold substantially all of its Marcellus assets to Williams Partners for $2.5 billion. Caiman continued to do business as Caiman Energy II LLC.

“We’re very proud of the expansive system we built in the Marcellus and the great relationships Caiman developed with producers and the people of West Virginia,” said Caiman’s chairman and CEO, Jack Lafield, in a prepared statement. “The development of this vast, liquids-rich resource [in the Utica region] will require similar midstream infrastructure as we built out in the Marcellus.”

The CEO of Williams Partners, Alan Armstrong, said his company has “long experience in successfully constructing and reliably operating large-scale midstream infrastructure” and expects to leverage existing commercial relationships. 

Caiman serves producers by providing natural gas and condensate gathering, compression, dehydration, measurement, treating and conditioning, processing, liquids transportation and fractionation services.

Caiman and NiSource join two other energy companies planning large midstream investments in the Utica region. Chesapeake Energy Corp. last month sold its midstream subsidiary to Global Infrastructure Partners for $2 billion, which is moving forward on Chesapeake’s intention to build a $900 million processing complex in Columbiana and Harrison counties (READ STORY).

In addition, MarkWest Energy of Denver is investing $500 million to build processing plants in Harrison and Noble counties.

BACKGROUND: 
Midstream Gas Processors Poised to Transform Region
Midstream Processors Stake Huge Claims in Eastern Ohio

Copyright 2012 The Business Journal, Youngstown, Ohio

Permalink Reply by Ronda on July 12, 2012 at 7:30am

From what I understand Cardinal Gas is offering $12 a foot for the Logtown pipeline (the one Col. Co. signed for) and $15 a foot for the Bergholtz pipeline.  The company seems set on these figures which in my opinion are low.  These pipelines could be used for years and that is a long time to have the land tied up in an easement.  This is okay if you are going to continue farming but I have frontage I was planning on developing in the future and the pipeline will have a great impact on the plans, who wants to live next to a pipeline?  As far as the suggestion about being a guardian for the pipeline I have not read anywhere on this website that someone was able to get a pipeline company to agree to that. Please let me know if anyone has been successful in obtaining that in their lease.  There is a good discussion on the Harrison County site started Dec. 5, 2011 entitile "Pipeline Easements", I learned a lot from it.

Permalink Reply by William Henceroth on July 13, 2012 at 11:34am

Cardinal walked my property on Tuesday.  Haven't heard anything from them after the walk.  They originally offered me $15 a foot.  I told them I would need at least $30 a foot.  This didn't seem to bother them.  Ronda you are right about the frontage.  This will limit how this can be used.

Permalink Reply by Linda Charles on July 13, 2012 at 2:07pm

Thanks William.......was the 30 to include the payment plus the damages amount I am seeing commonly offered?   I think its good for us all to communicate on these developments and appreciate your comments.

Permalink Reply by William Henceroth on July 13, 2012 at 3:08pm

Yes, the $30 would include both.  I would also use the ALOV Right of Way document.  I was offered $1500 for the consideration fee.  I have several other factors such as USDA, tax increases, etc., that they will have to address as well.  If they are not willing to pay for these they will need to go around my property.  I pipeline is there forever!

Permalink Reply by William Henceroth on July 13, 2012 at 10:36pm

Sorry, I didn't word my reply correctly.    The $30 amount would be broken down to include $15 for line and $15 for damages.  This is for tax purposes only, so it is $30 per foot total.  Crop damage, timber, etc., would also be additional.  It would be broken down this way in accordance with the ALOV agreement.  Sorry for the confusion.

Permalink Reply by Linda Charles on July 14, 2012 at 1:26am

Yes, I have been doing some reading and understand that the line fee is taxed as capital gains immediately while the damages are taxed as regular income payable upon sale of the property....a good tax break.   Do I read this right......the landman offered 1500?   That is interesting as it seems other offers were only 500.  

I think the ALOV lease is a good framework to negotiate.  The only things I would add are stipulations for removal of rocks, brush, etc generated from consruction...and stipulation for type of pasture grass seed to be used to reseed the construction site.   The projected path of the line passes through my patureland so that is important to me.  As mentioned by Rhonda....this line would impact a substantial area of my property that has road frontage.   My discussions will include allowances for a driveway....but also I dont want to lock out the chance for a well pad....and so I am thinking

Permalink Reply by Linda Charles on July 14, 2012 at 1:29am

(sorry for the split message...sometimes it doesnt let me move to the end of the message....darned technology)

Im wondering....can a drive be built over a pipeline that can handle the heavy truck traffic associated with a well site to include cranes, excavating equipment, etc?

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on July 14, 2012 at 7:21am

The short answer is yes, assuming the pipe is buried deep enough and the drive is built properly.  

Permalink Reply by Mike Powell on July 14, 2012 at 6:56pm

What type of tax increases would there be? I've been approached as well. I'm in Elkrun near the roger's sale.

 

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