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Two primary provisions for pipeline easement agreements

| Mar 9, 2021 | Oil And Gas |

Landowners and businesses negotiating a pipeline easement are looking to move forward with an agreement that best serves their interests. As such, it is important for all involved to carefully review the agreement and negotiate terms that meet their needs. Some of the more common terms that result in disagreement include compensation and the logistics of the pipeline.

#1: Compensation

One of the primary considerations involves landowner compensation. This refers to the payment the landowner receives in exchange for the business’ ability to use a certain, specified portion of their land. The Texas Bar Association, a group of legal professionals from throughout the state, notes the initial agreement generally favors the presenting party. As such, negotiations are common.

In general, the landowner should take into consideration not just the value of the land used by the business, but also the damage done to the land by the business’ use. This may begin with use of a local county appraisal or private appraiser to begin negotiations on the value of the land.

#2: The logistics of the pipeline

Some additional considerations include the specific dimensions of the easement such as the pipeline width and depth, the diameter and operating pressure of the pipeline, and the company’s egress and ingress routes.

Will the project require any surface facilities? If so, it is important to include a description of the facility and location within the easement agreement. It is also wise to include a provision discussing the ability to recover damages in the event of a disruption to the pipeline.

These are just a few considerations to keep in mind when negotiating these easements. It is wise to seek legal counsel experienced in this area of law to help better ensure you understand the benefits and risks of a proposed agreement. This professional can negotiate on your behalf, better ensuring your interests are represented and mitigating the risk of surprises in the future.