Projected Pipeline

[Jlblake]

Hello All -

I have a very unusual situation. I signed a contract to purchase 66 acres out in the country, north of Houston, Texas. The day after we signed the contract, the current owner was notified that the Permian Global Access Pipeline is or may be impacting the land. I am within my option period so I can completely back out, renegotiate or pay the agreed upon price. There is so much uncertainty and I want to make sure I am fair. I want the land but only if it will be quiet after construction. At this point, I'm not 100% certain that the property will be impacted. If it is impacted, it could just have a buried pipeline running through it...the pipeline company would pay for the easement.

I want the property but I have no way of knowing what a fair price is now. If the property ends up with a compression station nearby, the noise could ruin my intent for the land. I would lose money selling and I wouldn't want to be there if it isn't peaceful and quiet. Most of the little research I've found has more to do with the easement than the purchase price. What I did find that relates (and isn't written by and O&G company) indicates 5% to 40% decline in value depending on the situation...some research indicates 10-20%. I have revised my offer by reducing it by 15%. I would be open to paying that 15% in 5 years after the pipeline is completed if there is no impact.

It may not be a big deal but it could be a nightmare. Just dealing with it takes away from my enjoyment. If it goes bad, no amount of savings would be worth it. If it goes smooth, I'd be happy paying the contracted amount.

Have any of you dealt with something like this before? Any input?

Thanks!

 

[Diggin It]

I'd be concerned about the path. Across a corner? Or down the middle? How close to any potential future building sites?

 

[TheMan419]

I would talk with the current owner/seller. See if they will hold off on selling to you until you know what the deal is from the pipeline company. Letting them know, of course, there are scenarios that would cause you to back out completely.

If there are possible scenarios that would make you NOT buy the property I do not see how you go forward with the purchase until such time as you know what the pipeline company is going to do.

 

[Jlblake]

That is my problem. I have no idea where it will go or what the impact would be. There is no way the property is worth the same price given the uncertainty. I just don't know how much less it is worth.

 

[bigtiller]

my google said it is a 42 inch natural gas line.
That could be as high as 1500 psi.

I would want to know more about it also, before I lost the option to back out.

 

[Jlblake]

I may have to back out. The pipeline won't be built until 2024. Surveys won't be done until March 2020. The sellers are retirees wanting to move near family. I lowered my price by 15%. At that price, I'm willing to take the risk...that could work out in my favor or it could work out badly. I can't find any information that is very helpful unfortunately. It's just a weird situation. I do not want to take advantage of these folks but I'm going to have to deal with the whole process and even if it's the best possible outcome, it's a hassle. If it's the worst outcome, I'm stuck and out of a lot of money.

 

[Jlblake]

I called the pipeline company and they were very non-committal. I'm glad I found out now at least.

 

[hawkeye08]

If the price is right, then it might be worth the risk, you can always sell it if the impact is more than you want.

 

[Jlblake]

If the price is right, then it might be worth the risk, you can always sell it if the impact is more than you want.

That is the whole question. What is the right price?

 

[Diggin It]

Curious as to how you selected a tractor site for this question.