Showing Energy the Way

Pipeline Rights of Way: The next boom in the Haynesville Shale

For original version Click Here

BY KSLA News 12
January 23, 2009

SHREVEPORT, LA (KSLA) – Get ready for the next phase of the Haynesville Shale, as natural gas companies look to lay pipelines to get all that gas to market.

American Right of Way Associates CEO Don Valden is getting ready to train an army of new right of way agents to begin working the Haynesville Shale, “I think from what we’re hearing from all the experts, what happened in the Barnett Shale is gonna happen here, and I think it’s because the Haynesville Shale is larger than the Barnett, from what they’re telling us, I think there’s gonna be more people here, there’s gonna be a lot more infrastructure needed.”

And if the Barnett Shale is any indication, it won’t be long before pipelines will need to be laid in more populated areas. “It’s always been out in the rural areas,” says Valden, “but now because of the drilling activity we have now, there’s gonna be a lot more wells in the area in city limits, possibly around the city limits and then a lot more pipeline, you can’t get gas out without a pipeline.” Pointing to an aerial map, Valden shows how a proposed pipeline runs along property lines wherever possible. “We always try to find a route AWAY from homes, less impact on the property.”

An elderly Fort Worth woman made headlines this summer when her property was condemned to make way for a high-pressure pipeline. Jerry Horton was offered $12,000 dollars for her property, but she refused. Chesapeake subsidiary Texas Midstream took the land to build the high pressure pipeline under 31 properties on Carter avenue. Neighbors fought to have the pipeline built along nearby Interstate 30, but Chesapeake says the Texas Department of Transportation said “no.”

“Eminent domain is really a necessity,” insists Valden, “because if we didn’t have eminent domain, if the government wouldn’t have been able step in, we wouldn’t have highways to our properties, we wouldn’t have utilities, water, sewer lines…” Still, Valden says you can expect right of way agents to try to work with you. Pointing at the map, he traces a straight line across several fields, and through a development, “If the oil and gas companies wanted to, they could just put a line across here, but then there’s be issues, so it’s always easier to work with the landowners and try to – letting em know that we need to be able to get a pipeline through their property and we try to find the best route with the least impact.”

And if you’re along a possible route, you can expect to start hearing from those agents as early as this spring. That’s when Valden says all industry indicators point to things picking up then.

That’s why he’s expanding his family business out of Fort Worth. The American Right of Way Associates opened a Shreveport office last spring. He says he’s already seeing a lot of interest in “right of way” work, since the leasing frenzy has cooled considerably. Don Valden says compensation for right of way depends on where you are, and how much access is needed. “Whatever the strip of the land, the length times the width, divide that by the acre, figure out how many acres we’re talking about for the right of way, and then it’s based on that, and it’s based on first the assessed value and if the appraised value, they go based on that. A lot of oil & gas companies now, they’re actually paying more than the actual values.” Once a pipeline has been laid on your property, you can still grow crops on it, put a fence across, and even pave it. You just can’t build any permanent structures over it.

While there aren’t yet any major pipelines in construction yet, plans are in the works. Plans for a 150-mile “Haynesville Shale Connector” were proposed in August of 2008. The proposal is a joint venture involving Houston-based M2 Midstream and DCP Midstream Partners, a subsidiary of Spectra Energy and ConocoPhillips. Calls for an update of the status of those plans were not immediately returned, but the company’s web site says, “If built, the Haynesville Connector is expected to commence initial deliveries in the third quarter of 2009 and would offer an estimated 1.5 billion cubic feet per day of takeaway capacity by early 2010 to help meet producers’ anticipated needs for pipeline infrastructure in the Haynesville Shale.”