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Sunday, January 11, 2015

Paperwork filed by Nexus for huge Ohio pipeline

Initial paperwork has been filed with the Federal Energy Regulatory Commission by Houston based Nexus Gas Transmission LLC for construction of a 42 inch natural gas pipeline that will be capable of moving 1.5 billion cubic feet of gas per day. The cost of the project will be $2 billion. The 250 mile pipeline will begin in Columbiana County in eastern Ohio cross the state to Defiance in northwest Ohio and then head north into Michigan and into Ontario to connect with existing pipelines. It will traverse 11 counties in Ohio and 3 in Michigan. Ultimately it will connect to the Union Gas Limited Dawn Hub in Ontario. Four new gas turbine compressor stations will be constructed in Columbiana, Medina, Erie, and Lucas Counties.
From an economic point of view this is tantamount to scattering $2 billion along a 250 mile corridor for the bulk of the expenditures will be in wages paid to construction workers and to 3479 landowners to purchase a 50 foot right of way across their properties. While there is some opposition among property owners the misery of being exploited by big energy companies may pale in comparison to the misery of not being exploited. Consider:
Using data from the Marcellus one finds that compensation to property owners has run from $5 to $25 and above per linear foot. A large project such as this would certainly be in the higher end of that range if not beyond.
In addition to the permanent right away pipeline companies must lease a temporary, additional construction easement which is more compensation.
Frequently signing bonuses are paid to induce rapid acceptance of the agreements.
The landowner is paid for loss of the use of his land during the construction phase.
If the right of way runs through woodland the pipeline company may simply purchase timber rights to the land.
The money derived from the sale of the permanent easement is treated as capital gains for tax purposes meaning that the property owner only pays tax on 50% of that part of the compensation.
All said, a person could find himself pretty well off just for getting out of bed in the morning.
According to Nexus work on the pipeline will begin in January 2017 with the pipeline going into service in November 2017.

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