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Midstream company looking at wide area for pipelines



Published: Wed, January 1, 2014 @ 12:00 a.m.

Companies trying to get property owners to sign right-of-way leases

By Burton Speakman

and Tom McParland

news@shalesheet.com

YOUNGSTOWN

A few years ago, there was the rush of companies coming to the Mahoning Valley to lease mineral rights for drilling.

Now there is a new blitz from companies seeking land rights, but this time they’re looking to the surface.

When people were first signing rights leases, landowners who had large swaths of property made considerable profits leasing to companies. Now people are giving up right of way for their property, but they’ll be paid only if their land is used.

Diana Marchese, Trumbull County recorder, said that in Johnston Township in northeast Trumbull County, companies are trying to get as many property owners as possible to sign right-of-way leases.

The companies don’t seem to be considering any type of organized route, she said.

Three Rivers Midstream LLC, a joint venture of Williams Partners LP and Shell, filed options for land easements in Trumbull County, seeking land to construct pipelines.

According to one document filed with the Trumbull County recorder, the company and its successors would have access to a 75-foot strip of land to construct a pipeline for the “transportation of oil, gas and petroleum.”

Under the agreement, Three Rivers Midstream would pay landowners if the limited-liability company chooses to use part of the property, but it is unclear how much that sum would be.

Three Rivers has five years to decide whether to use the land, according to the document.

“That’s a very long period,” said Alan Wenger, an attorney at the Youngstown law firm Harrington, Hoppe & Mitchell. “[Land use attorneys] like to keep it to two [years] because the market can change.”

The situation in Trumbull has not been common in the area. Most companies have been more limited in seeking right of way, he said.

There have been several companies working to get pipeline leases in Columbiana County, said Terry McCoy, former chairman of the business development committee at the Columbiana Area Chamber of Commerce.

“Williams was probably the most aggressive, but they’ve since moved on to other parts of the state,” McCoy said.

There weren’t any companies in Columbiana County that just attempted to lease as much land as possible, he said.

“But on the other hand, these companies are willing to make changes. If you don’t agree to lease, they won’t think twice to curve that line to get around you,” McCoy said.

The people who were patient and had strategically located properties were able to get a little more money, he said.

Wenger said it’s all a part of strategic “gamesmanship” and “posturing” between the companies and landowners in negotiating easements.

For instance, he said the first landowners to sign an agreement may not get as much money as the last because companies have a better idea of pipeline routes later in the process.

But it could be risky for landowners to sign over right-of-way rights so that companies can build and operate pipelines that could be in use for generations.

“It’s not really logical from a landowner’s point of view,” Wenger said. “Why shouldn’t they pay ... the landowners over the years while the land is being used?”

It’s also a “huge intrusion” that could effect the soils for years to come, Wegner added.

“This is a very serious granting of rights to these companies,” he said.

Williams Partners LP announced the formation of Three Rivers Mainstream in April as a joint venture with Shell to “provide gas gathering and gas processing services” for production in Northwest Pennsylvania, according to a press release.

A representative from Williams Partners could not provide specific information on where the pipelines would lead, but the company’s CEO, Alan Armstrong, said in the statement that Three Rivers Midstream would build a system of pipelines expected to connect to Shell’s proposed ethylene cracker plant in Pennsylvania and to the proposed Bluegrass Pipeline network.

That system, a Williams and Boardwalk Pipeline Partners venture, would deliver liquids from the Marcellus and Utica shales to the Gulf Coast and export markets.


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