South Bow Puts Prairie Connector Pipeline Decision on Hold Until 2027

South Bow, a Canadian company, announced it will make a decision by mid-2027 on whether to proceed with its proposed partial revival of the Keystone XL oil pipeline. The company has secured binding contracts from oil companies for 20 years, securing enough shipper commitments to advance the project.

The proposed pipeline, dubbed Prairie Connector, would increase Canada's crude exports to the U.S. by 12%, adding much-needed Canadian pipeline capacity. It would use some of the already-assembled Keystone XL pipe on the Canadian side of the border and has a potential capacity of 550,000 barrels per day.

South Bow CEO Bevin Wirzba emphasized that the company cannot proceed unless it has evidence that the U.S. permit granted by President Donald Trump is 'durable' and will not be revoked by a future administration. Analysts warn that without such assurances, the project may be stalled due to the risk of a new U.S. administration revoking the permits in 2029.

The pipeline's construction could cost $2.2 billion (C$3 billion) and take two to three years to build after an investment decision. This is part of Canada's efforts to increase its oil exports, with forecasts suggesting production will climb from 5.5 million barrels per day in 2024 to 6.1 million barrels per day by 2030.