An Introduction to Various Issues Surrounding the Ownership of Storage/Pipeline Gas

Volume 44, No 3 ISBN: 1925-8356   |   Courtesy of Canadian Energy Law Edition   |    View Original

Authors: Chris Simard, Andrew Lamb

The issues surrounding ownership of pipeline and stored gas have been largely ignored in Canada, with the result that many in the industry may be surprised to learn that their interests in such resources are not necessarily secured. By applying the most recent legal decisions in Canada and the U.S. to the practical possibility of an operator’s insolvency, the authors discuss the likelihood, explore the advantages, and address the dangers of casting this relationship as a tenancy in common, bailment, or trust. While the importance of protecting a client’s rights through extensive contractual principles is paramount in every relationship, the extent to which the judiciary will endorse contractual intentions in these unique circumstances is far from certain. This article explores the practical questions respecting issues of ownership and security as regards the natural gas arena to propose finally a new class of ownership that would treat natural gas rights as a sui generis category unique to storage/pipeline gas.

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