What is the going price paid in Calcasieu Parish for pipeline right-of - ways?
Latest experience (2009), with Kinder-Morgan, was $350/rd. for ROW plus $1200/acre for temporary construction side use.
Lease payment is based on the easement’s length, not width.
Pipeline Company X should bury the pipeline at least thirtysix inches (36”) underground. To maximize your future development options, ask the Pipeline Company to bury the pipeline at least forty eight inches (48”) underground. This will satisfy parish, state, and federal development regulations.
approx $20 per linear foot, or $330 per rod is a current nationwide standard. You could probably get a $500 - $1000 lease bonus. If they've contacted you they really like your alignment.Dear DaveE,
Do you actually mean to say that if a landowner finds out the national average is 330 per rod and he is offered 400 per rod for two different pipeline plans, one a single use 4" line, with a 50' workspace and the easement being the width of the line after installation, and the other a 50 foot wide easement for multiple use with an eye to creating a pipeline corridor that provides for a 100' workspace during construction, there is no difference to you in price because both lines contain the same amount of linear rods? Is that really what you meant to say?
I am glad that you did not continue to quote the pundit on gohaynesvilleshale that the pipeline company holds the ultimate trump card - eminent domain. That only applies to common carriers.
Just curious, what part of the government do you work in?
DaveE said:
Lease payment is based on the easement’s length, not width.
Pipeline Company X should bury the pipeline at least thirtysix inches (36”) underground. To maximize your future development options, ask the Pipeline Company to bury the pipeline at least forty eight inches (48”) underground. This will satisfy parish, state, and federal development regulations.
approx $20 per linear foot, or $330 per rod is a current nationwide standard. You could probably get a $500 - $1000 lease bonus. If they've contacted you they really like your alignment.
Dear Buddy C.
To answer your question directly, yes. Based on my knowledge, width is irrespective of length in pipeline ROW lease valuation unless the lease terms become overly complicated for some reason.
Typical payments involve a set dollar amount per linear foot (or per ‘rod’ - 16.5 feet). I know some operators will assign a value per 'adulterated' acre, but it's not standard. The issue is ROW market value; not percieved value for relenquished access to the acreage: total width x length, volume or otherwise. Prudent operators with shareholders will offer a land owner $20 a linear foot to construct and manage a pipeline on their property, longterm.
I am involved in EHS compliance for the oil and gas industry. I am engaged in a variety of due diligence and compliance functions throughout the US. My clients include super majors and mom and pops.
If you have a difference of opinion, please enlighten me.
I agree that market value is the important part. I have a monopoly on my land. If you contacted me I am in the best angle for you, or I’m your second choice because you thought the first land owner was unreasonable. Meet my price or go around, simple as that. The longer it takes you to decide might also have a bearing on price. Next months price may be higher than this months price. Nothing personal, it’s just business.
Dear DaveE,
Like RW Kennedy said, we have a monopoly on our land.
When you say that length is the controlling factor and it makes no difference as to amount of land consumed in the easement or the purpose of the line, it just does not wash with me and my nearly 40 years of experience, employed by supermajors, large independents, small independents and now consult for both operators and family owned professional lessors.
Perhaps we are just approaching the issue from divergent angles. I am approaching the issue from the landowner standpoint - if you want a field line gathering my gas, I might charge nothing. If you are putting in a CO2 pipeline through a tract of land where the highest and best use of that property is one of a pipeline corridor, I would be much more aggressive in pricing of an easement on my property.
You should see my easement form. It even stipulates where marketable timber is to be stacked, with the ends pointing outward for ease of removal by my timber buyer.
I had a landman tell me that my price (at the time) of $200 per rod completely ridiculous and out of touch with the going rate (based on a single use line with a 10 year term). I told him that my price just went up to $250 per rod and did he really want to continue trying to negotiate?
Since you asked to be enlightened, saying that it makes no difference as to the width or use of the line and the number of lines that can be put in the easement, does not make business sense. Whether you choose to define the price by rod, pole, perch or running foot makes no difference to me.
I would also take a wild guess that you have never bought a ROW from someone like me or Rocky Arrell.
DaveE said:
Dear Buddy C.
To answer your question directly, yes. Based on my knowledge, width is irrespective of length in pipeline ROW lease valuation unless the lease terms become overly complicated for some reason.
Typical payments involve a set dollar amount per linear foot (or per ‘rod’ - 16.5 feet). I know some operators will assign a value per 'adulterated' acre, but it's not standard. The issue is ROW market value; not percieved value for relenquished access to the acreage: total width x length, volume or otherwise. Prudent operators with shareholders will offer a land owner $20 a linear foot to construct and manage a pipeline on their property, longterm.
I am involved in EHS compliance for the oil and gas industry. I am engaged in a variety of due diligence and compliance functions throughout the US. My clients include super majors and mom and pops.
If you have a difference of opinion, please enlighten me.
Another twist: my owner group only grants/signs “term” easements of negotiated length of years with extenstions provisions of stated fee basis plus CPI index formula. This permits us to recognize the ROW $receipts as rent or ordinary income rather that having to account for “cost basis”. Recent ROW in Orange Co., TX (immediately west of Calcasieu) was $850/rod for 25 year term, plus $250/rod adjusted by CPI for successive 10 year extensions to a 75 year term limit.
I appreciate the answers you have provided. It does give me something to go on. I am sure they are not going
to give me their best offer right out the shoot.
Thanks,
Bill