A Canadian company named South Bow is proposing to revive sections of the Keystone XL oil pipeline, potentially boosting Canada’s crude exports to the U.S. by over 12%. This revival plan, if approved by U.S. President Donald Trump and with the construction of additional links to U.S. refining hubs, would take a different route through the U.S. compared to the previously canceled Keystone XL project under former U.S. President Joe Biden in 2021.
South Bow, established by former Keystone XL proponent TC Energy in 2024 to manage its oil pipeline business, is contemplating reviving portions of the pipeline already built in Alberta and possessing all necessary Canadian permits. Canadian Prime Minister Mark Carney discussed the pipeline’s potential revival with Trump in October, seeing it as a negotiating leverage point for the upcoming Canada-U.S.-Mexico trade agreement talks.
The proposed partnership between South Bow and Bridger Pipeline aims to construct a 1,038-kilometer pipeline with the capacity to transport up to 550,000 barrels per day, stretching from Phillips County, Montana, near the U.S.-Canada border, to Guernsey, Wyoming. However, to reach refining hubs like Cushing, Oklahoma, Patoka, Illinois, and the U.S. Gulf Coast, further connections would be necessary as Guernsey alone is not an end market for crude oil.
Matthew Lewis, founder of Plainview Energy Analytics, suggests the most feasible configuration would involve a new pipeline of over 680 kilometers connecting Guernsey to Steele City, Nebraska, where it could link to the existing Keystone mainline system. The project’s success hinges on overcoming permit challenges and potential environmental litigations, with uncertainties surrounding the project’s risk management.
Bridger’s proposal to construct the Montana-to-Guernsey leg alongside existing pipeline infrastructure aims to streamline permit acquisition. On the Alberta side, approximately 150 kilometers of Keystone XL pipeline remains idle post-cancellation. While the White House refrained from commenting on the South Bow-Bridger proposal, analysts highlight the necessity of a presidential permit for the U.S.-Canada border-crossing segment.
Despite differences from Keystone XL, the revived pipeline project is anticipated to face opposition from environmentalists, landowners, and Indigenous communities due to its large-scale nature. With the project’s political risks spanning multiple administrations, uncertainties loom over its long-term viability and potential regulatory hurdles.
Simultaneously, Enbridge and the company behind the Trans Mountain pipeline are pursuing their own expansions, adding to the competitive landscape of export pipeline projects. Enbridge’s approved expansions for its Flanagan and Mainline pipeline systems are deemed less complex and more economically viable compared to South Bow’s proposal, raising financial questions from investors about the latter’s ability to balance project financing with dividend maintenance and debt management.
