ROW for Pipeline

What is the going rate for ROW for Pipeline going on properties in the Eastern part of Shelby County?
What are the things that I should ask for to be put in the agreement?
Are there any "pitfalls" that I should be looking for?
This land has no house on it. There is timber potential in the foreseeable future. I'm not sure whether this is the only company that will be contacting me, so should I hold out and see if another company contacts me????
How do I find out if other people in the area have gotten the same agreement?

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Permalink Reply by Bobi Carr ("parker") on December 31, 2009 at 1:14am
Permalink Reply by Eric Camp on October 16, 2008 at 8:49am
My answer is based on practicing law in Texas but I don't think there are too many difference in Louisiana law on this issue. If Louisiana is different on an issue, someone please correct me.

We price our ROW's based on linear feet, not rods but the conversion is easy (1 rod = 16.5 linear feet). $125 a rod = $7.58 a linear foot. This seems very low. Based on my experience and depending on the location/value/use of the property, you could demand up to $25 a linear foot or $412.50 a rod. And that isn't even talking about your timber. You should be compensated for the present and future value of whatever timber they are going to remove.

Other than the price for rod, you are right to assume there are a lot more issues to negotiate. Here's a list of things you should try to get in the ROW:

1) No surface equipment allowed (or limit the equipment, by name, if they have to put something there);
2) Pipeline should be buried at least 42 inches under the ground.
3) There should actually be 2 ROW's in your agreement - 1 temporary (50ft) that expires once the pipe is laid and 1 permanent of 30 feet.
4) Limit the substances that can be transported through the pipeline;
5) ROW should be for a single pipeline;
6) Landowner is allowed to use the surface over the pipeline for anything that does not interfere with the pipeline;
7) Company is responsible for maintaining the ROW;
8) Company has to pay to restore the property, not just return the soil. Require double-ditching so that the topsoil get back to the top. Require them to keep replanting until the grass has permanently returned;
9) Company is only entitled to access the ROW, not any other part of the property;
10) Company is strictly liable for any damages caused by itself, its contractors, and sub-contractors;
11) Place restrictions on the contractors activities (no guns, hunting, fishing, trash, pictures, etc.)
12) Restict all company activity outside the ROW area;
13) Company is strictly liable for environmental damages and indemnifies landowner;
14) All types of roads can go across the ROW without company's permission;
15) Company cannot grant ROW's inside the ROW area;
16) Company can make no more uses of the property than those expressly granted;
17) Inspections can only occur during normal business hours with proir notice to the landowner;
18) Landowner has a right to recover damages for disruption due to maintenance, repair4, replacement, and other activities in the ROW area in the future;
19) ROW reverts back to landowner after abandonment and abandonment occurs after 2 years of non-use;
20) Landowner has the right but not the obligation to force the company, at the company's sole expense, to remove its structures in the event of abandonment;
21) Warning signs must be placed in one place;
22) Include a Secrecy Agreement so that you can demand better terms;
23) Include drawings;
24) Landowner does not warrant title;
25) Landowner has the right to move the pipeline at its expense;
26) The proper description of ROW (not just the legal description of the property);
27) Written, short timetable for construction;
28) Limit the company's routes of ingress and egress;
29) Require that all roads used by the company will be repaired to their former condition or improved when the construction is finished;
30) Limit the maximum pressure the line can transmit to as little as possible;
31) Require additional payments to landowner if the original line or any subsequent line is replaced;
32) Make company liable for the payment of all survey, filing, and attorney fees incurred incidental to the condemnation; and
33) For income tax purposes, apportion the payments for the acquisition of the actual easement and for damages.

Bottom line, at least in Texas, is that if you don't come to an agreement on a ROW, the company can use the power of eminent domain and condemn your land. They want to avoid this because it is expensive. And you want to avoid it too because of the expense and likelihood of a lesser payment than you could have received through negotiations and lack of the terms I mentioned above.

Also, prior to signing a lease, strike out the language that allows the lessee to lay pipelines across you land. If they have that right by lease, they don't have to get another ROW Agreement (and pay you again).

Hope this helps.
Permalink Reply by little ole 1st grade teacher on December 31, 2009 at 1:31am
Yes, this does help and my land is in Shelby County, Texas.
Do you have any idea whether this would be the only ROW company that would be contacting me?
If I don't sign a contract with this ROW Company will they "condemn" my land and I'll have no recourse but to accept that which is offered?
Also, how will my Natural Gas Well leasing company respond to my accepting a contract with this company or another company? Is this something that they would want to help get the Natural Gas out to market?
I'm so confused because this came out of the blue. The Well leasing company has said nothing about this contract to me I have put in a call to them today and have not talked with anyone at this time.
I plan on talking to someone today (Thursday).
Any other guidance that you can give will be deeply appreciated.
Thanks
Permalink Reply by Bobi Carr ("parker") on December 31, 2009 at 1:58am
First of all don't let them make you feel pressured. You can only make a good decision after you get a chance to review all of the information.

I don't know if you are likely to receive any other offers, but if you post who it is from others may be able to tell you.

Also keep in mind that their first offer does not mean this is the maximum that they will pay. You will need to negotiate what the ROW is worth.

In my opinion, the most important thing to find out is whether the company has imminent domain. Also you want to have an attorney review your lease and find out if you have given them the right to a pipeline in the lease. Don't let the row agent interpret the lease for you have it done by a professional.

GOOD LUCK.
Permalink Reply by etx44 on January 15, 2010 at 8:29am
Get them to mail you an offer, many of your needs may be met already.

Use that as your starting point. Stay in contact with your neighbors, they may be as much or more help than your lawyer.

To avoid pressure deal with their rep by mail, email or phone, not in person landmen are great salesmen.

And forget the phrase " going rate " pipeline easement rates are going up lot in East Texas.
Permalink Reply by Clay G. R. on January 26, 2012 at 10:53pm

Wondering whether pipeline company's request for addendum to original ROW agreement to construct a 2" line from existing well to Tenaska gathering pipeline (approx 75') to "improve" well production is standard protocol. What, if any, are pitfalls to an addendum to avoid loss of land use, timber harvesting or condemnation of same. Production from original drill 2.5 yrs has been minimal to non-existent to date. Is additional line to "increase production" standard operating procedure?  Appreciate any input.

Permalink Reply by JHH on January 27, 2012 at 7:55am

depends on what your original ROW agreement states.  if it's for only one line... you should be compensated for a second line.  will they need more land...ROW for the line... damages... timber... what's flowing... what does it tie into?  remember... pipelines are there forever.  i think if you work with them... they'll be reasonable... maybe.  also, there's some good information on this thread.   check it out too.

Permalink Reply by Shelby Guy on February 4, 2010 at 1:38pm
I've received an offer from Tenaska for a line in rural southeastern Shelby County. (24-inch gas pipeline, 50-foot easement, 50-foot temporary construction easement) They're offering payment by the acre -- $6,600 per acre for permanent easement, $400 per acre for temporary easement. I've calculated this to translate to about $128 per rod in my case, which seems really low. The agent says they won't negotiate on the permanent easement, but there may be some room on the temporary. He's already mentioned the possibility of using eminent domain. The property was replanted in pines a few years ago.

Any thoughts on this offer?
Permalink Reply by Bacon on February 4, 2010 at 2:30pm
Get an attorney. They'll usually pay for themselves many times over with these ROW negotiation / agreements.
Permalink Reply by etx44 on February 4, 2010 at 6:59pm
Did they mail you an offer, do you know your neighbors, is this a gathering line ?
$128 per rod is very low. Threatening eminent domain to start with means you drew a Jerk for a land man. Get with your neighbors and get a good lawyer.

First get the details you want in their offer in writing including a plat map referred to in the agreement. Save the price for last and never meet this jerk in person with out your Lawyer.

Gathering lines in East Texas one pipe $ 250 to $ 350 a rod, Inter State line ask your Lawyer.

Take it slow and good luck !!
Permalink Reply by Texas Gal on February 8, 2012 at 7:27pm

It would be very wise to either hire a good oil and gas lawyer or mineral manager to assist you. The ROW Agreement is very important and you need one to protect you. As Bacon stated, they usually pay for themselves. 

I am currently working with a mineral manager to negotiate a pipeline ROW on my land in another county. (My mineral manager earned his fee in negotiating the land entry permit for survey purposes.) The first letter that I received from the pipeline company emphasized their power of "eminent domain."  I think these companies try to use this threat as a scare tactic.  

The pipeline company recently sent me an offer for $297 a rod.  Since there are hardwood trees to be compensated for, etc., this will have to be negotiated and the final price should be substantially higher. My mineral manage will definitely earn his money here.

 

 

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