Pipeline facilities now owned by South Bow Corp. are seen in Hardisty, Alta., in 2015.Jeff McIntosh/The Canadian Press
The signing of a key U.S. presidential permit was a meaningful development for a new Canadian pipeline, says the company behind the potential project, but it remains wary of exposing itself to undue risk.
If built, South Bow’s Prairie Connector pipeline would largely follow the route of the long dead Keystone XL line and carry roughly 450,000 barrels of oil each day from Hardisty, Alta., to the U.S. border. There, it would connect with a multidestination line proposed by Bridger Pipeline LLC, a private oil transportation company based in Casper, Wyo.
“We’re seeing great alignment amongst the regulatory environment in both Canada and the United States, but we cannot expose our shareholders to risks that they cannot bear,” South Bow chief executive Bevin Wirzba told analysts on a Friday morning earnings call.
Mr. Wirzba’s comments hark back to the financial wallop caused by the cancellation of the Keystone XL project, after Joe Biden ripped up a key presidential permit when he took office in 2021.
At the time, Keystone XL was owned by TC Energy. Besides forcing the company to declare a writedown of $2.2-billion, it also meant a $1.3-billion loss for Alberta taxpayers a year after then-premier Jason Kenney’s government bought an equity stake in the project and provided loan guarantees. (TC later spun its entire oil pipeline business into South Bow, a new, separate company.)
Mr. Trump signed an order last week authorizing the construction of the Bridger line. That was a “meaningful development,” Mr. Wirzba said Friday, but South Bow is still figuring out whether Prairie Connector would fall within the company’s risk tolerance.
A call to oil companies to commit barrels to Prairie Connector ended March 30. South Bow is now determining whether there is enough commercial support to advance the project, though it has already approached farmers and ranchers in southwest Saskatchewan to re-survey land that lies along the original Keystone XL route.
Keystone XL was first proposed in 2008. The target of climate-change activists in Canada and the U.S., it was subject to years of protests, studies and court challenges.
The idea behind Prairie Connector is to address growing crude production in Western Canada, Mr. Wirzba said. In the oil sands, that boost to barrels has largely come from using new technology to optimize performance.
Oil companies have recently pushed the federal government to reform energy development policies and regulations so they can attract investment capital, further expand operations and meet a global demand for crude – particularly in the midst of the energy crisis caused by the war in Iran.
Increased clarity on the regulatory and policy environment will guide the company’s subsequent moves beyond what it can service with Prairie Connector, Mr. Wirzba said.
As for the project itself, Mr. Wirzba said the next step is preparing for a potential investment decision. That will involve drawing up contracting strategies, supply chains and cost estimates.
“All of those things are in line, but also we’re kicking off significant permitting efforts across the system in the United States, as well as doing the preliminary work in Canada.”
South Bow is “looking to execute this with as little risk as possible, and that’s key to structuring our arrangements with our partners,” he added.
Iran’s retaliatory Feb. 28 closing of the Strait of Hormuz, a vital shipping route for one-fifth of the world’s oil, has countries scrambling to source alternative supplies. Many are looking to North America, which has experienced a huge boost to exports as a result.
South Bow’s Keystone system transported more than 600,000 barrels a day during the first three months of the year. As the quarter progressed and the effects of the war became more pronounced, the company saw strong demand for its pipelines, particularly on the U.S. Gulf Coast, Mr. Wirzba said.
Meanwhile, Enbridge Inc., another Calgary-based energy infrastructure company, sanctioned roughly $2-billion worth of projects during the first quarter of 2026.
In the U.S., that includes an expansion of its Tres Palacios gas storage facility, which will add three caverns to boost energy security in the Gulf Coast market, and a 300-megawatt wind power facility in Texas to provide electricity to Meta’s data-centre operations.
It also gave the thumbs-up to an expansion of its Vector Pipeline, which delivers natural gas to Dawn, Ont., from Joliet, Ill. Demand exceeded capacity in a recent call for commitments to the line, which indicates “further expansion potential” of the line, a Scotiabank research analysis stated on Friday.