Hi everyone,

Does anyone have any experience dealing with pipeline right of ways? I have some land that a pipeline company is considering to put a pipeline through. Its in the very early stages, they are considering 3 options at the moment but our land is the most direct route. Its an oil pipeline from a fracked well to another location. Can anyone share what I should be looking for in terms of compensation? The land is currently vacant and I had thoughts of building on the land. Is it best to take a land buyout or take royalties? I know its not a lot of info to go on and I don't even have all the details at this point, I'm just curious if others could share what is typically done in situations like this.

Definitely do not use the agreement they offer you. Speak to a competent oil & gas attorney. Judon Fambrough at the Real Estate Center at Texas A&M is the best, if he's still working. In my experience (not an attorney), compensation depends on many factors: remainder value, trees, grantee access, number of pipelines or other items to be installed in the ROW, materials to be transported, temporary construction easements, surface use, abandonment, etc. A good attorney will cost some, but will net you more and save you headaches and resale value in the future. A bad pipeline ROW agreement will negatively impact your resale value.

We had a chunk of land. An oil company wanted to build a gas pipeline across the land to connect with their other pipeline.

First we looked at their proposed routes. Their preference was to cut straight through the property. We wanted them to follow previous pipeline routes along the roads beside the property. They eventually agreed although it was a longer route.

The other discussion surrounded compensation per rod (distance). They low balled. We kept aiming for a higher price based on our lawyer's recommendation. Finally, corporate weighed in and said they would not go higher and showed us where they'd never paid more per rod in the state on their pipelines. We agreed to their terms at the highest rate, and it was fairly lucrative.

My advice would be to retain legal counsel, and be patient. They probably need the route through your land more than you do. Stick to your guns and you can extract maximum compensation for your troubles.

where is your land?

Thanks for all the responses, I'll definetely get legal counsel to work through everything and good advice on not accepting their standard agreement. Our land is in northwest Grimes county.

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Its an oil pipeline from a fracked well to another location.

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This sounds more like a flow line. Does the company have the minerals leased where they are proposing the line?

Easiest thing it to get a knowledgeable attorney involved, but if it's a short run or the company has the minerals leased, the attorney may end up costing you more than you'll receive for the ROW.

Royalties are out of the question. You'll get paid based on length of pipeline going across property. Doesn't matter how much product runs through it. Also depends on size of pipe and damages to surface.

You can't build on top of pipeline.

In that area you are probably looking at $400-600/rod. Just hire an attorney and let them do the language. Don't grant an exclusive easement if you can avoid it. Seems to be the popular thing these days.

Don't settle for a flat fee, try and get a % of the revenue from all hydrocarbons flowing through the line.

But also be aware that oil companies aren't making money like they did when oil was $100, so you might be looking at a lot less than others have gotten in the past

I work for a pipeline company, in this day I never see or hear of someone getting any sort of royalty. I suppose I hear of annual lease payments on ROW, but 99% of the ROW we buy is a flat fee per rod. The amount varies pretty wildly depending on what state and county. I'd guess ROW in Grimes county is going to be on the lower end of what we see so the quote about $400-600/rod is probably about right. And ROW cost isn't going to go up with oil at $40

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In that area you are probably looking at $400-600/rod. Just hire an attorney and let them do the language. Don't grant an exclusive easement if you can avoid it. Seems to be the popular thing these days.

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absolutely this.

Buy a ton of cows and hope the a drunk pipeliner runs it over in his company truck...that my friend is how to get paid!


or get a good attorney to help - good luck

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Buy a ton of cows and hope the a drunk pipeliner runs it over in his company truck...that my friend is how to get paid!


or get a good attorney to help - good luck

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Even better, get horses or cats or dogs or something that could be easily argued as a "pet"

Thanks to all the responses, Its a very interesting situation and it is I believe what one poster called a flow line more than a pipeline. I find it hard to think it makes any sense for me to allow an easement on my property for a small sum of money and won't be interested at all if that is the case. I wonder if construction cost for this flow line will factor into this at all. The alternate routes are 1 mile to 3 miles longer and go through a lot more properties so I would think the construction costs alone would be much greater for them to use them but I'm just not interested at all in having any sort of easement on my property unless its a very large sum of money or some % of revenue generated. I'm surprised the market rate to allow a ROW is so low, but I guess for large unused tracts it may make sense. Does anyone have any insight on how this plays out if I am the lone holdout on this route? I'm assuming they keep upping to the compensation to see if you'll play along and I'm sure there is a threshold value that makes no sense for them as well. I don't see this actually happening on my land, unless there is some screwy eminent domain issue, which I would be surprised if it existed in this situation.

If it's a well they're trying to tie in to a common battery, they will likely not pay more for the flow line (ROW included) than it will cost to build an exclusive battery for that well.

If you don't want a flow line buried on your property, that's absolutely your choice. My company owns pasture and crop land and we're happy to sell ROW. We get paid way above market rate for the acreage disturbed (which really isn't disturbed after the ditch is back-filled), and we get to keep the acreage.

My opinion is that ROW money is free money for the landowner. A year after the pipeline is built, you will hardly notice that the pipeline is there. These big ranches in South Texas make millions and millions of dollars on this. We call it "farming pipelines"

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Thanks to all the responses, Its a very interesting situation and it is I believe what one poster called a flow line more than a pipeline. I find it hard to think it makes any sense for me to allow an easement on my property for a small sum of money and won't be interested at all if that is the case. I wonder if construction cost for this flow line will factor into this at all. The alternate routes are 1 mile to 3 miles longer and go through a lot more properties so I would think the construction costs alone would be much greater for them to use them but I'm just not interested at all in having any sort of easement on my property unless its a very large sum of money or some % of revenue generated. I'm surprised the market rate to allow a ROW is so low, but I guess for large unused tracts it may make sense. Does anyone have any insight on how this plays out if I am the lone holdout on this route? I'm assuming they keep upping to the compensation to see if you'll play along and I'm sure there is a threshold value that makes no sense for them as well. I don't see this actually happening on my land, unless there is some screwy eminent domain issue, which I would be surprised if it existed in this situation.

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There will not be any eminent domain since this is not a common carrier line. They can either work with you and hope to reach a deal or reroute. It comes down to a choice of cost of reroute vs. cost of paying more for ROW. However, that doesn't mean they will pay out the ass for your easement. If they want to continue doing business in the area they don't want to set a precedent for paying crazy amounts per rod. Take your free money and hope that others will try to parallel later. Or tell them you aren't interested and let your neighbor collect his check.

If a cow dies, drag it into the trench and brush off the drag marks. Make sure they know its a prized cow, and a pet, and your kids loved it