Pipeline Equities
PO Box 571977
Houston, Texas 77257
Phone: 713-623-0690

Pipeline Recovery

excavation & removal

Damage Assessment

of easements

Pipeline Appraisal

pipeline property valuation

Is My Salvaged Pipeline An Asset Or Liability?

Whether your excavated and salvaged pipe is considered an asset or liability depends on the specific circumstances and accounting principles applied. Here are some factors we take into consider when making this determination:

The primary purpose of the excavation plays a significant role in classification. Obviously, when one of our pipeline excavations is conducted with the intention of using or selling the salvaged pipe, it is more likely to be considered an asset. Likewise, if one of our pipeline excavations is due to environmental or regulatory requirements, it will be considered a liability and proper handling/disposal methods need to be addressed.

When we are salvaging line pipe that is in good working condition, it will be considered an asset since it can be used in future projects. If the line pipe we are salvaging is damaged, corroded, or no longer usable, we consider it to be a liability. David Howell wrote a two part article: Methods for Determining the Value of Pipelines, Part 1 & Part 2 published in Pipeline & Gas Technology.

If your organization owns the line pipe to be salvaged, it is more than likely considered an asset on the books. If the pipe belongs to a third party, it may be treated as a liability or contingent liability. It is important to consider the accounting standards or principles applicable to your organization. Different standards (e.g., Generally Accepted Accounting Principles or International Financial Reporting Standards) may have specific guidelines in place for the treatment of salvaged pipeline. If the excavation and salvage are related to environmental cleanup or regulatory compliance, this may affect the classification. Environmental liabilities are often treated as obligations or liabilities on the balance sheet.

Salvaged line pipe that has future economic benefits and plans to use it is definitely an asset.

Many factors go into determining whether excavated and salvaged pipe is an asset or liability including the purpose of excavation, condition of the pipe, ownership, accounting standards, regulatory considerations, management’s intent, and materiality. 

“Our goal is always to keep the salvaged pipe above the scrap value and sell it into the structural market. The most destruction of good structural grade steel pipe results from contractors or equipment operators who do not understand the value of this product and treat it as junk. And junk it becomes at the hands of the uninformed. At that point, it has value only for what it will bring at the local scrap yard.” – David Howell

Contact Pipeline Equities for any questions regarding salvaged pipeline.

pipeline recovery

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Pipeline Recovery Manual

A complete guide to the business of recovering out of use pipelines

Sign up for our free newsletter to receive your complimentary copy of our Pipeline Recovery Manual that explains our entire process for recovering or salvaging idled or abandoned pipelines.

You will see how we deal with landowners regarding notification and recordings. How to draft a contract of sale with models by: Exxon, Texaco, Koch and others and pictures showing actual work in process.

The manual shows Pipeline Equities job references, right of way releases, agreements and the history and background of Pipeline Equities and managing partner David Howell. These references touch on parts of the six million feet of line removed or handled by the company over the past twenty years.

A line pipe table describing various weights, grades, and pressure ratings of ERW and seamless line pipe is included. This section is an indispensable tool for anyone doing operational word with line pipe.

Also included are extensive glossaries of pipe, pipeline, and right of way terms.

pipeline appraisal

Request a complimentary Pipeline Appraisal Handbook

Fill out this short form and you will be sent a confirmation link to our Newsletter. Once you click the link you will be subscribed to our newsletter and taken to a page where you can download the Pipeline Appraisal Handbook.

Pipeline Appraisal Handbook

The Definitive How-To Guide on Establishing Values for Pipelines

This handbook written by David Howell, managing partner of Pipeline Equities is the basic text of any pipeline valuation. All of the essential factors for establishing the value of a pipeline are discussed along with exclusive proprietary formulas and tables essential to a certified appraisal.

Also included are 32 pages of pipe weight and grades tables that cover virtually any situation which might be encountered regarding line pipe requirements. Additionally you’ll find an extensive glossary of pipe, pipeline and right of way terminology is part of the Handbook.

Subjects include: Replacement, Right of Way, Surface Inventory, Throughput, Salvage/Recovery, and comparable sales histories to name a few of the basic factors of pipeline appraisal.

The author recognized a need for a report or “how to” manual for properly appraising pipelines and pipeline right of ways. Currently the work is being done by accounting firms, engineers, and real estate appraisers.

This handbook draws from 45 years of experience.

Howell has forty-five years experience in many sectors of the petroleum industry from drilling contractor and oil and gas operator to pipe and supply distribution throughout the world. He has published Tradex Equipment magazine, the Whole World Oil Directory, and the Texas Oil Register.

For the past twenty years, Howell has been almost exclusively engaged in pipeline sales and acquisition, appraisal, removal for salvage, environmental remediation and general pipeline operations.

Howell currently serves on board of the Pipeline Appraisal Institute and is a member of the International Right of Way Association. Howell is a graduate of Texas A&M University – Kingsville and a native of Alice, Texas. He is currently residing in Houston and is the managing partner of Pipeline Equities.