# Price per foot/rod for new pipelines

Kinder Morgan pipeline company is putting a pipeline across my property in Westhoff. I need to know what a reasonable price per foot or rod would be in order to understand their offer. Any advice will be appreciated. Jim F.

Last year a pipeline went through some of my land in Nueces County, Texas and they paid me \$2.25/inch of pipeline diameter and another person got \$2.50/in. The pipe was 21" in diameter. Right now my attorney is in the middle of negotiating with another pipeline company on a different place and they are being very difficult to deal with. They are putting in a 42" pipeline and are only paying \$1.50/inch or \$63/ft.

I thought most pipelines were measured in rods... not inches. There are 198 inches in a rod. So, i'm calculating that to work out at \$447.75/rod. That's not a bad price. But i've heard anywhere between \$200/rod to \$800/rod. Depends on a lot of variables. How many rods will be leased? What's going through the pipe... oil, gas, gas liquids? Do you have protections? Also... these pipelines are "forever". Some people negotiate an upfront price per rod and a monthly/yearly payment. Your land value could diminish because of the pipeline... thus lower property taxes in the future. lots to think about. Most pipeline companies are easy to work with. But you have to be careful with some of them.

Math sometimes causes me to stumble a bit. But if someone is paying 1.50 an inch... the price would be \$18/foot... not \$63. At \$63/foot... the math works out to be \$5.25.inch...right... times 198/in (1-rod) = \$1,039/rod... which would be unbelievably Outstanding! Who is paying \$63/foot for a pipeline?

I am being approached by the same company only in Lincoln County Oklahoma. Kinder Morgan just acquired Copano energy recently. You need to let everyone know what size line (diameter) they are wanting to put in the ground. It makes a difference in the final price per foot or per rod. Hope this helps. Good luck

Dear Jack,

The computation is using pipeline diameter as part of an equation. For example, a 20 inch line x \$2.00 per inch gives us a rough starting figure of \$40.00 per foot. We are using apples and oranges to come up with an estimation.

Buddy Cotten

Buddy,

i'm all mixed up! Ha! So, what would be the "ball-park" answer to the original question from Mr. Faulkner?

Buddy Cotten said:

Dear Jack,

The computation is using pipeline diameter as part of an equation. For example, a 20 inch line x \$2.00 per inch gives us a rough starting figure of \$40.00 per foot. We are using apples and oranges to come up with an estimation.

Buddy Cotten

Mineral Manager

Nobody can answer Mr. Faulkner's question until more is known.

What "going rate" means to me is that is what trade the weakest and less knowledgeable landowners signed for. Last 2 ROW that I negotiated were for \$900 per rod and \$675 per rod -- on the same line in the same county. All line sections are fact specific and how hard you want to be.

I will try one more time to explain the \$2.00 per inch thing. Here is the equation:

(Nominal diameter of pipe) x \$2.00 = Asking price per foot

A 36 inch pipe would be priced out per foot, using the above formula:

(36) x \$2.00 = \$72.00 asking price per foot.

Jack hodges said:

Buddy,

i'm all mixed up! Ha! So, what would be the "ball-park" answer to the original question from Mr. Faulkner?

Buddy Cotten said:

Dear Jack,

The computation is using pipeline diameter as part of an equation. For example, a 20 inch line x \$2.00 per inch gives us a rough starting figure of \$40.00 per foot. We are using apples and oranges to come up with an estimation.

10-4 Buddy. That's helps

jhh

Buddy Cotten said:

Nobody can answer Mr. Faulkner's question until more is known.

What "going rate" means to me is that is what trade the weakest and less knowledgeable landowners signed for. Last 2 ROW that I negotiated were for \$900 per rod and \$675 per rod -- on the same line in the same county. All line sections are fact specific and how hard you want to be.

I will try one more time to explain the \$2.00 per inch thing. Here is the equation:

(Nominal diameter of pipe) x \$2.00 = Asking price per foot

A 36 inch pipe would be priced out per foot, using the above formula:

(36) x \$2.00 = \$72.00 asking price per foot.

Jack hodges said:

Buddy,

i'm all mixed up! Ha! So, what would be the "ball-park" answer to the original question from Mr. Faulkner?

Buddy Cotten said:

Dear Jack,

The computation is using pipeline diameter as part of an equation. For example, a 20 inch line x \$2.00 per inch gives us a rough starting figure of \$40.00 per foot. We are using apples and oranges to come up with an estimation.

Buddy Cotten

Mineral Manager

just to verify. A 12" oil pipeline... times \$2.00 equals \$24 a foot... which works to \$24x16.5 equals \$396 per rod? Is the \$2 price a standard or average price per inch. Does the market determine the \$2 or is it circumstances/location of pipe or both... or more issues? By the way, this is a great conversation and very helpful! what about the price for salvaged pipe? we got an offer of \$2.25/foot. Is that high or low or what? I think it is an old 24" gas line. If we're offered \$2.25/foot... what do they sell it for... approximate price? Gotta be at least \$5 or more?

Jack hodges said:

10-4 Buddy. That's helps

jhh

Buddy Cotten said:

Nobody can answer Mr. Faulkner's question until more is known.

What "going rate" means to me is that is what trade the weakest and less knowledgeable landowners signed for. Last 2 ROW that I negotiated were for \$900 per rod and \$675 per rod -- on the same line in the same county. All line sections are fact specific and how hard you want to be.

I will try one more time to explain the \$2.00 per inch thing. Here is the equation:

(Nominal diameter of pipe) x \$2.00 = Asking price per foot

A 36 inch pipe would be priced out per foot, using the above formula:

(36) x \$2.00 = \$72.00 asking price per foot.

Jack hodges said:

Buddy,

i'm all mixed up! Ha! So, what would be the "ball-park" answer to the original question from Mr. Faulkner?

Buddy Cotten said:

Dear Jack,

The computation is using pipeline diameter as part of an equation. For example, a 20 inch line x \$2.00 per inch gives us a rough starting figure of \$40.00 per foot. We are using apples and oranges to come up with an estimation.

Buddy Cotten

Mineral Manager

The way I look at a pipeline is not by the ft or rod but buy the number of acres that will be in the permanent and temporary work easement. I want to know the width of the permanent and temporary easements and many more things.

If local newspapers would have articles about prices being offered it would educate a lot of people. In the oil and gas business it seems everything is a big secret! Mineral and landowners don't want to share information that would help each other very much, usually.

Jack hodges said:

I thought most pipelines were measured in rods... not inches. There are 198 inches in a rod. So, i'm calculating that to work out at \$447.75/rod. That's not a bad price. But i've heard anywhere between \$200/rod to \$800/rod. Depends on a lot of variables. How many rods will be leased? What's going through the pipe... oil, gas, gas liquids? Do you have protections? Also... these pipelines are "forever". Some people negotiate an upfront price per rod and a monthly/yearly payment. Your land value could diminish because of the pipeline... thus lower property taxes in the future. lots to think about. Most pipeline companies are easy to work with. But you have to be careful with some of them.