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South Bow aims for a decision in 2027 on Canada-US oil pipe revival

The company announced on Friday that it had secured the shipper agreements it needed to move the project forward. The proposed 550,000-barrel-per-day Alberta-to-Wyoming pipeline, dubbed Prairie Connector, could increase Canada's crude exports to the U.S. by 12%, ?adding much-needed Canadian pipeline capacity.

South Bow, in collaboration with its U.S.-based partner Bridger Pipeline, has said that it had'secured 20 year binding contracts' from oil companies, through a process started this year to gauge interest. This?month, sources said that South Bow is close to achieving its goal of 450,000 bpd or 80% initial pipeline capacity.

PIPELINE - PARTLY ASSEMBLED in Canada

South Bow was spun off by TC Energy, the former Keystone XL promoter, in 2024 to takeover its oil pipeline business.

The new pipeline will not use the same route in the United States as an earlier project, which was canceled by former President Joe Biden in 2021. However, some of the Keystone XL pipe that has already been assembled on the Canadian border would be used.

The new proposal has been granted a cross-border permit by U.S. president Donald Trump. South Bow CEO Bevin Wizba said on Thursday that the company could not proceed until it had evidence of a "durable" permit, and that it would not be revoked in the future by another administration.

TPH Energy analyst AJ O'Donnell said that while the open season was successful in securing?shipper's commitments, there are still lingering risks with the U.S. Permit.

O'Donnell stated that "without assurances" that the new U.S. government would not revoke permits in 2029 as Biden did for KXL, it is likely the project will be stalled.

South Bow hasn't publicly disclosed the price of its project. However, ATB Capital Markets analysts estimated that it would cost $2.2 billion ($3 billion C$) and could take between two and three years to complete after an investment decision.

Canada is the fourth largest oil producer in the world, producing 5.5 million barrels per day. Forecasts indicate that this could rise to 6.1 millions bpd in 2030. Reporting by Amanda Stephenson, Calgary; Arathy Smasekhar, Houston Editing Rod Nickel

(source: Reuters)