An oil pipeline crossing the Canada-US border may be back on government agendas, as the proponent, South Bow Corp (TSX:SOBO), looks to revive the long-dead project.
TC Energy (TSX:TRP) spun the oil pipeline component of its business out to South Bow in 2024 to concentrate on natural gas and power.
The rationale for Keystone was a way to bring together booming US oil production, and to a lesser extent, production from the oil sands in Northern Alberta, to Gulf Coast refineries that were facing declining imports from Mexico and Venezuela. The project was first proposed in 2008 and was supposed to begin carrying 830,000 barrels a day in 2012.
But the Obama administration struck it down on environmental grounds. President Trump then revived it during his first term, before Joe Biden killed it again by revoking the pipeline’s permit on his first day as president in 2021.
A network of pipelines called the Keystone Pipeline already exists and moves oil within the United States. The pipeline expansion would allow more oil sands crude to flow to the US Gulf Coast, cutting through Montana, South Dakota, and Nebraska before heading south.
Earlier this month, CBC News reported that a proposal by South Bow to revive parts of the canceled pipeline could increase Canada’s crude exports by 12%. However, it would need a green light from President Trump, and additional links to US refining hubs are required.
Canadian Prime Minister Carney reportedly brought up the pipeline’s revival in a conversation with Trump in October.
Just over a year ago, Trump pledged easy regulatory approvals for the project, saying in a Truth Social post, “We want the Keystone XL Pipeline built.”
The new pipeline, renamed Prairie Connector, would take a different route through the US than the previous Keystone XL project. CBC says South Bow is considering reviving some of the line that was already built in Alberta and has the necessary permits.
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The 450,000?barrel?per?day line is planned to extend from Hardisty, AB, to several US delivery hubs, including Cushing, Oklahoma, and the Gulf Coast. The original alignment followed the existing Foothills natural?gas system owned by TC Energy, which carries Alberta natural gas to the US border.
South Bow is reportedly “getting its ducks in a row” by approaching farmers and ranchers in southwest Saskatchewan to re-survey land that lies along the original Keystone XL pipeline route.
The Calgary-based firm said March 5 it has launched an open season for its proposed Prairie Connector pipeline, running until March 30, after which it will assess commercial support.
