Crosstex NGL Pipeline, LP v. Reins Road Farms-1, Ltd

November 30, 2013 § Leave a comment

The Beaumont Court of Appeals recently affirmed the Denbury decision in Crosstex NGL Pipeline, LP v. Reins Road Farms-1, Ltd.[1] Again, the common carrier status of a pipeline was placed under scrutiny. Crosstex’s pipeline at issue was to transport natural gas liquids (NGLs). The Natural Resources Code provides common carrier status for crude petroleum pipelines.[2] The court distinguished between a substance in its natural state and NGLs, which can only be derived by processes above the wellhead.[3] Therefore, NGLs did not fall within the meaning of crude petroleum and common carrier status under this statute was not attained.[4] The Beaumont Court of Appeals then analyzed whether the pipeline met the public use requirement under the Texas Business Organizations Code to be a common carrier.[5] Using the Denbury analysis, the Beaumont Court of Appeals agreed the trial court could properly find the pipeline lacked sufficient public use to qualify as a common carrier.[6] The important point to highlight is that Denbury’s guidelines for proving common carrier status appears applicable to more than just pipelines that transport carbon dioxide. [1] Crosstex NGL Pipeline, L.P. v. Reins Road Farms-1, Ltd., No. 09-12-00563-CV, 2013 WL 2250747, at *5 (Tex. App.—Beaumont May 23, 2013, no pet. h.). [2] Id. at *1. [3] Id. at *3-4. [4] Id. at *4. [5] Id. [6] Id. at *6 (noting, like Denbury, that Crosstex’s website was inconsistent with the evidence presented on common carrier status).

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