Unlocking the Hidden Value in Your Pipeline and Midstream Infrastructure

Pipeline and midstream infrastructure carry more than just oil and gas, they carry opportunities for tax savings that many operators overlook. Beneath the surface of every pipeline, compressor station, and tank battery lies a story, and understanding that narrative can mean the difference between overpaying and finding significant value.

Consider utilization. If it’s not properly reported, it’s not being applied, and even when it is, how it’s applied can often be challenged. Methodologies vary, and knowing the right one to advocate for can make all the difference. Above-ground infrastructure, like midstream facilities and compressor stations, also holds untapped potential. The key is understanding how these assets are truly used and ensuring that is reflected in the assessment.

The materials that make up your pipeline are equally significant. Steel, plastic, buried, unburied—the distinctions aren’t just academic. If a plastic pipe is valued as steel, you could be missing out on as much as a 20% reduction. Age, size, and condition play pivotal roles, too. Every detail builds a case for accurate valuation, and each one adds nuance to the broader financial picture.

Ownership tells another critical part of the story. Companies that control the wells feeding their pipelines hold more value than those relying on third parties. Without control, utilization becomes unpredictable, diminishing the pipeline’s worth. Control isn’t just a business advantage; it’s a valuation multiplier.

Then there’s pollution control. The unassuming erosion berms and water recycling facilities that dot your operations could be hiding significant savings. Properly navigating TCEQ exemptions can transform these features into powerful tax assets. The language you use to present these elements matters; understanding how to tell this part of the story can make or break an application.

The product flowing through your pipeline speaks volumes, too. Crude oil and natural gas are valued differently, and failure to report specifics can lead to default assessments on the highest-value schedules. These are the quiet inefficiencies that, when addressed, can yield substantial financial returns.

Market conditions and intent round out the narrative. Why was the pipeline acquired? Was it part of a larger deal? Is it aging out of use? These factors shape the pipeline’s current value in ways that numbers alone can’t fully capture. Even the overlooked assets—old compressor stations or outdated fiberglass rods—have a place in this story. Reclassifying or devaluing these items ensures the focus remains on what truly drives profit.

Pipeline infrastructure isn’t just a collection of assets, it’s a living, evolving system. Understanding its intricacies, interpreting its nuances, and crafting its story with precision can transform your tax burden into a strategic advantage. It’s not just about what you pay, it’s about paying only what you truly owe.