A Louisiana appeals court on Wednesday ruled that Energy Transfer LP may not block DT Midstream Inc. (DTM) from building natural gas pipeline crossings underneath its system, with one judge stating that Energy Transfer’s property rights do not extend “to the center of the earth.”

In a unanimous ruling by the three-judge panel, the Louisiana Second Circuit Court of Appeal said land rights granted to Energy Transfer for the ETC Tiger Pipeline LLC do not extend beyond dimensions aimed at preventing uses that could damage or interfere with its pipeline.

Energy Transfer had argued its 42-inch diameter gas pipeline had exclusive rights under agreements with a landowner. The Dallas-based company also cited concerns about safety. A year ago, a division of the 42nd Judicial...