The Houston Court of Appeals decided a case recently on whether a pipeline was a common carrier or not. The issue is very important: if a pipeline is a common carrier it has condemnation power, and if it is not a common carrier it does not.
In T.B. Farms, Ltd. v. Grand Prix Pipeline, LLC, No. 01-23-00243-CV, 2025 WL 920101 (Tex. App.—Houston [1st Dist.] Mar. 27, 2025, pet. filed), T. B. Farms in Madison County, Texas claimed that Grand Prix was not a common-carrier pipeline owner with statutory eminent domain authority because it was only an alter ego of Targa Resources Corp., and Grand Prix’s true purpose was to transport Targa’s own liquids, not for the public. The evidence showed that Targa had an ownership interest in Grand Prix.
The Court noted that the natural gas liquids that the Grand Prix pipeline would carry falls within the definition of crude petroleum, which is required for condemnation authority. The Court held that that it was reasonably probable that the Grand Prix pipeline would serve at least one unaffiliated customer based on Grand Prix’s evidence of a transportation services agreement with a third party.
T.B. Farms claimed the third-party contract was fictitious but submitted no evidence on that point. T.B. Farms has filed an appeal with the Texas Supreme Court.