We allowed a gas pipeline that runs to the refinery to be laid across our land (100 plus acres) in Tilden, McMullen County, Texas a couple years ago. We now have an offer for another pipeline that will run alongside the first one. We want a fair price and asked for $38 a foot. The pipeline company declined but offered far less. We basically don't care if they go around us. Is there a law that will force us to allow another pipeline and accept whatever is offered for the betterment of the common good?
I think it depends on whether it is interstate or intrastate. There is a possibility of eminent domain issues. More information would be required
Ruben, I think they could force you to allow a new pipeline if it is declared a common carrier, but if it's a common carrier, any company would be able to buy space in the line. The company may not want to have their line declared a common carrier because in the future they may have to put in yet another line because other companies have taken up their excess capacity in this one. Your first line is probably either private or has no excess capacity. Good luck with making them negotiate fairly.
Ruben,
Both guys are correct. It depends on whether or not it is common carrier. I have two common carrier lines across my place in Caliham. My Brother-in-law is currently negotiating with a company that wants to put a gas pipeline across his place and they are not common carrier. He told them to either pay his price or go around. Send me a friend request if you wish to discuss further.
This article mentions the pipeline. Scroll down to see the area that goes through Tilden
http://www.rbnenergy.com/plains-trains-and-diluent-deals-crude-and-condensate-at-st-james-la
Not sure this is it as this line just went into service last week. This is a crude oil line and he said gas pipeline company. May be another company.
Mr. r w, thanks for your response! The second pipeline company has a name different from the first, yet rumor has it that both companies are actually one and the same. Where can I research to learn whether the first pipeline has been declared a common carrier? Is this something I should have considered before signing that first pipeline contract a couple years ago? Am I possibly locked into an agreement where I have to allow as many pipelines as needed AND locked into the same low rate I was paid for the first pipeline?
Michael, thanks for the article.
Michael Hutchison said:
This article mentions the pipeline. Scroll down to see the area that goes through Tilden
http://www.rbnenergy.com/plains-trains-and-diluent-deals-crude-and-...
Depends on how your first ROW agreement was written. If it said for one pipeline then they would have to pay you for any additional lines.
Ruben, whether the first pipeline is a common carrier or not probably doesn't matter. A private line could lease excess capacity if they wanted to and some other company would rather do this than put in their own line if space were available. The difference would be that a common carrier could not refuse to carry some other companies production if space were available. In the future that pipeline owner might have to place another line just to carry their own production, which they may not want to do. I'm sure the company would rather remain a private line so the choice would be theirs whether to carry for someone else or not. You need to look at the first pipeline contract to see what rights you have already granted, whether it's exclusive right to easements (nobody, power/electric/water /another oil company could cross without their permission), whether the easement was for one or multiple lines. The companies standard contract could include everything but the kitchen sink.
The issue about whether they are a common carrier is uncertain right now. The Texas Supreme Court came out with an opinion recently that says, in essence, just because the pipeline company declares itself to be a common carrier on a form filed with the state does not mean it necessarily is a common carrier.
You should ask them whether they are claiming they have a right of eminent domain if you don't want to lease it.
is $10.00 ft a fair rate. i can allow or disallow this extra request. almost 8000 ft of pipeline
Ruben & Thomas,
I recommend that you hire someone to represent you in your negotiations. Buddy Cotten is a regular contributor on this forum and is an experienced mineral manager who represented me and my family in 2012 during our pipeline negotiations. We were very pleased. Check out Mr. Cotten's web site at Cotten Oil Properties.com for more information and how to contact him.
Since my experience is in WV don't know if this will be of any help. But, here is how it worked for me in WV.
If it isn't eminent domain, it all depends on what is in the first R-O-W agreement. So, I put in the agreement that it applied only to the initial line and any and all additional lines would be separately negotiated. That worked and and I have since negotiated additional lines. The going rate here last year was $1 per inch diameter per linear foot.