South Bow plan to revive elements of Keystone XL wants Trump approval, U.S. oil pipeline hyperlinks

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A proposal led by Canadian firm South Bow to revive elements of the cancelled Keystone XL oil pipeline might enhance Canada's crude exports to the U.S. by greater than 12 per cent, if it will get a inexperienced gentle from U.S. President Donald Trump and extra hyperlinks to U.S. refining hubs are constructed.

The brand new proposal entails a distinct route by way of the U.S. than the earlier Keystone XL pipeline venture cancelled by former U.S. President Joe Biden in 2021, after years of Indigenous and environmental opposition.

South Bow, which was arrange by former Keystone XL proponent TC Power in 2024 to take over its oil pipeline enterprise, is contemplating reviving among the line that was already in-built Alberta and already has all crucial Canadian permits.

Canadian Prime Minister Mark Carney introduced up the pipeline's revival in a dialog with Trump in October, and it might present him leverage in upcoming negotiations round renewing the Canada-U.S.-Mexico (CUSMA) commerce settlement.

Trump — whose tariff wars and annexation threats have strained relations with Canada — has repeatedly known as for decrease oil costs, and plenty of U.S. refiners rely upon the roughly 4.4 million barrels per day of exports that Canada sends south of the border.

South Bow's potential U.S. accomplice, Bridger Pipeline, lately filed a proposal with Montana regulators that describes the development of a 1,038-kilometre pipeline — able to transporting as much as 550,000 barrels per day — starting close to the U.S.-Canada border in Phillips County, Montana, and transiting to Guernsey, Wyoming.

However analysts say Guernsey will not be an finish marketplace for crude oil, so extra hyperlinks would should be constructed to move oil to refining hubs comparable to Cushing, Oklahoma; Patoka, Illinois; and the U.S. Gulf Coast.

WATCH | Talks of Keystone XL pipeline revival met with cautious optimism: Talks of Keystone XL pipeline revival met with cautious optimism

Prime Minister Mark Carney raised the Keystone XL pipeline venture throughout conversations with U.S. President Donald Trump on Tuesday, in line with a supply CBC Information will not be figuring out as a result of they weren't approved to talk publicly. The information has proponents questioning whether or not the more-than-once cancelled venture could possibly be revived once more. Probably the most credible configuration can be a brand new pipeline spanning greater than 680 kilometres from Guernsey to Steele Metropolis, Nebraska, the place it might connect with the present Keystone mainline system, mentioned Matthew Lewis, founding father of Plainview Power Analytics. From there, the oil might transfer into underutilized pipelines operating towards Cushing, Patoka and Wooden River, Illinois.

It stays unclear, nevertheless, who can be keen to tackle the chance related to that leg of a venture.

"The largest problem on this plan in a Guernsey-to-Steele Metropolis section is gaining permits, and constructing new pipeline that may probably face environmental litigation tying up such a venture up in courtroom," Lewis mentioned.

South Bow mentioned its proposal might connect with downstream pipelines within the U.S.. however declined to remark additional. Bridger Pipeline declined to remark.

Leveraging present infrastructure Bridger is proposing to construct the Montana-to-Guernsey leg in areas alongside present pipeline infrastructure, its software states, which might probably make getting required permits simpler. On the Alberta aspect, roughly 150 kilometres of Keystone XL pipe is already constructed and has been sitting idle since that venture was cancelled.

A White Home spokesperson declined to touch upon the South Bow-Bridger proposal, however analysts mentioned a presidential allow can be required for the section that crosses the U.S.-Canada border. Even when the Trump administration helps the plan, there isn't a assure that the subsequent U.S. administration would, mentioned Richard Masson, former CEO of the Alberta Petroleum Advertising and marketing Fee.

<img loading="lazy" srcset="https://i.cbc.ca/ais/1.5742717,1612487266000/full/max/0/default.jpg?im=Crop%2Crect%3D%280%2C39%2C640%2C350%29%3BResize%3D796 796w,https://i.cbc.ca/ais/1.5742717,1612487266000/full/max/0/default.jpg?im=Crop%2Crect%3D%280%2C39%2C640%2C350%29%3BResize%3D1083 1083w,https://i.cbc.ca/ais/1.5742717,1612487266000/full/max/0/default.jpg?im=Crop%2Crect%3D%280%2C39%2C640%2C350%29%3BResize%3D1280 1280w" sizes="(max-width: 762px) calc(100vw - 32px),730px" src="https://i.cbc.ca/ais/1.5742717,1612487266000/full/max/0/default.jpg?im=Crop%2Crect%3D%280%2C39%2C640%2C350%29%3B" style="aspect-ratio:1.8285714285714285" data-cy="image-img"/> Pipe prepared for use for the development of the Canadian leg of the Keystone XL in Alberta close to the city of Oyen, in September, 2020. (Kyle Bakx/CBC) Whereas the proposal could also be totally different than Keystone XL, it stays a large-scale pipeline enlargement and can probably appeal to the ire of environmentalists, landowners and Indigenous communities, Masson mentioned.

Many pipeline initiatives within the U.S. have been cancelled or slowed down in litigation. Trump and his crew have tried to chop regulation and pace permits, however a multi-year venture throughout a couple of administration would carry political threat.

"It brings up all the identical points. For individuals who wished Keystone XL cancelled, that is all the identical stuff," Masson mentioned.

Competing export pipeline expansions The proposed venture comes on the identical time that the corporate behind the Trans Mountain pipeline from Alberta to Canada's west coast is planning a collection of enhancements that would enhance its capability by 360,000 bpd.

South Bow's competitor, Enbridge, has already authorized enlargement initiatives for its Flanagan and Mainline pipeline techniques, which can add a mixed 250,000 bpd of capability for Canadian heavy oil shippers transferring crude to the U.S. Midwest and Gulf Coast.

These initiatives are easier than South Bow's proposal and can be extra financial, mentioned TD Securities analyst Aaron MacNeil.

He mentioned South Bow will face questions from buyers about its means to finance a brand new pipeline venture whereas sustaining its dividend and avoiding taking over an excessive amount of debt.