Latest News

Canadian oil tycoon supports South Bow pipeline in order to boost US exports

The Canadian tycoon, who is the CEO of one of North America’s?fastest-growing oil companies, said he supported a proposal that could potentially revive parts the former Keystone XL pipe and?wants Canada to use the project as a?leverage? in upcoming negotiations with the United States. Adam 'Waterous, CEO of Strathcona, has said that he prefers a new West Coast pipe to gain access to Asian markets. Waterous is one of Canada's leading oil dealmakers and his comments are the first time a Canadian oil shipper has publicly endorsed a new pipeline project led by Canadian firm South Bow, which could increase Canada's crude exports into the U.S. The comments by Waterous, one of Canada's most aggressive oil industry dealmakers, are the first public statements made by a Canadian oil shipper in support of a new pipeline proposal led Canadian company South Bow that could increase the country's crude exports to the U.S.

South Bow launched a competitive bidding process last week offering 450,000 barrels per?day of contracted pipeline capacity from Hardisty, Alberta to multiple U.S. delivery points including Cushing, Oklahoma, and destinations on the U.S. Gulf Coast. South Bow began a competitive bid process last week, offering 450,000 barrels of pipeline capacity per?day from Hardisty in Alberta to several U.S. destinations, including Cushing, Oklahoma and destinations along the U.S. Gulf Coast. This was to assess potential commercial use. Waterous refused to confirm if Strathcona would commit barrels for the South Bow Project, citing ongoing negotiations. Waterous cited his company's stated aim to increase its oil production to up to 300.000 barrels per day by 2035, from 125,000 barrels a day in 2026.

Waterous stated, "I was a very early supporter of this project."

"And we're looking for egress," he said. He was referring to the ability of oil shippers to transport their products to market. Waterous, however, said that the South Bow proposal was not the first choice of the Canadian oil industry to boost crude exports. Waterous says that more than 90% (of Canada's) oil exports are currently shipped to the United States. Canadian oil shippers, he said, have been seeking greater market diversity for years.

Waterous stated that Canadian oil companies would like to see a new pipeline built to the Pacific to complement the Trans Mountain pipeline, which currently runs from Alberta up to the British Columbia coast, and provides a route to Asian markets.

Four other large Canadian producers of oil sands did not reply to a question about if they supported the South Bow proposal.

Potential Political Benefits The Alberta government said that it would submit an application to the federal government for approval of a new crude-oil pipeline from the west coast. However, no private company had said they would build the project.

Waterous stated that the South Bow pipeline proposal has the potential to be built?faster, cheaper, and with more political benefit for Canada. He suggested that Canada could use Trump's previous comments to its advantage, saying he wanted to see the Keystone XL Project built. Mark Carney, the Prime Minister of Canada, has also 'raised the prospect with Trump of reviving Keystone XL Oil Pipeline?from Alberta into the United States in his efforts to ease tensions between trade between the two nations.

Waterous stated that "the utility of a pipe to the south" is to help achieve a tariff deal to protect Canada's steel and auto sectors while also allowing its oil sector to expand. (Reporting and editing by Caroline Stauffer in Calgary, Deepa Babington, and Amanda Stephenson)

(source: Reuters)