In early 2014 we had a client request help negotiating a pipeline right of way.  The right of way was short, quite a bit shorter than 1000 feet, and the pipeline wasn’t large, only twelve inches.  But the property was important to our client, who wanted it to be protected from unexpected use and abuse.

We negotiated for months.  The location of the right of way never changed, but some important details did.  Our client wanted to get rights to free gas from a well that was on the property, wanted to terrace the right of way to make it more useful for cultivation, and wanted to have the company push dirt across a waterway to create a pond.

As we negotiated, it became clear that the company would be unable to terrace the right of way because state law required that the right of way be returned to it’s original contours.  The company was also unwilling to push dirt anywhere outside the confines of the right of way due to liability issues.  The company was also unwilling to provide free gas as they had started making payments in lieu of free gas, as was provided for in the original oil and gas lease.

Because we had asked for a number of reasonable things, and the company kept saying no to them, the company eventually agreed to fence in the right of way.

Additionally, we were able to get a clause saying that if the pipeline wasn’t used for three years that the right of way would revert back to our client.  We were also able to limit the company to just one pipeline instead of giving them the option for a second pipeline at their pleasure.  Additionally, the company had requested the right to use all existing and future roads on the property for access to the right of way.  We were able to get that removed.

The company also agreed to more than double the amount of money it had originally offered to pay for the right of way.

After a while, the company decided that fencing the right of way was going to be too much of a hassle, and too expensive for them, and asked that our client take a lump-sum payment in lieu of building a fence.  Our client got a couple of bids and decided to take the money as it was significantly more than what the materials would cost.

In the end, our client was paid three times what the company had originally offered to pay for the right of way, and the property was protected from overuse by the company.

We got to that point by asking for far more than we expected to ever get from the company.  The addendum we send to landmen when we start to negotiate is lengthy and comprehensive, and lets them know we are experienced and knowledgeable.  In short, the landman knows we won’t accept an agreement that gives up all control of the land to the company.  As a result, we start off negotiations in a position of strength.  Negotiations are balanced, and our clients get a much better deal than they otherwise would.

If you want help with a pipeline right of way, give us a call at the office.  We’ll be glad to help you.