landowner

Pipeline ROW lease?

I've probably thrown this out there before but I am still wondering if anyone has ever had any luck leasing a pipeline ROW instead of giving the permanent servitude. Say a 50 or 100 year term? This would be for a line that has nothing to do with production in our units.  Thanks.

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landownerPermalink Reply by Henry on June 1, 2012 at 8:00

Bacon,

I did not give a permanent servitude.  My agreement called for the servitude to end when the pipeline is abandoned.


landownerPermalink Reply by Bacon on June 1, 2012 at 17:08

Right, we have that clause as well.  We have a Gulf South pipeline that has been there 50 years and could be there another 50.  I saw on another board that a poster claimed they only did "term" leases for ROW's.  Not sure where he is but will update if I can get ahold of him.

"Another twist: my owner group only grants/signs "term" easements of negotiated length of years with extenstions provisions of stated fee basis plus CPI index formula.  This permits us to recognize the ROW $receipts as rent or ordinary income rather that having to account for "cost basis".  Recent ROW in Orange Co., TX (immediately west of Calcasieu) was $850/rod for 25 year term, plus $250/rod adjusted by CPI for successive 10 year extensions to a 75 year term limit."

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