A New U.S.-Canadian Cross Border Pipeline?

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Two proposed oil pipelines--Bridger and the Prairie Connector--could utilize leftovers from Keystone XL. But does Canada want to expand its trade relations with the United States?

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Prairie Connector Vetted for the Green Light

South Bow, a spinoff of TC Energy, said it was vetting the conclusion of an open season on a new U.S. pipeline that would utilize parts of the Keystone XL to determine if it would go forward.

Data from Industrial Info Resources show South Bow is affiliated with 53 separate pipeline assets related to the Keystone XL or the Keystone oil pipelines. Networks begin in Hardisty, Alberta, to a border crossing at North Dakota. From there, it runs south to Nebraska, with laterals running to Illinois and the U.S. Gulf Coast.

Calling it the Prairie Connector, South Bow is planning for a new pipeline with a capacity of 450,000 barrels per day (bpd) that would utilize parts of the Keystone XL pipeline, which never made it to completion because of various political hurdles.

Running from Hardisty, the project would extend to various U.S. storage hubs such as Cushing, Oklahoma, and along the U.S. Gulf Coast. Utilizing the leftovers from Keystone XL could increase Canadian deliveries to the U.S. market by 12%.

Much of the U.S. refining sector is tailored to process the heavier types of crude oil such as what's found in Alberta, rather than the light, sweet shale oil at home. Canada is a net exporter of crude oil to the United States, accounting for about 60%, or around 4 million bpd, in foreign deliveries.

South Bow on Friday said in its report for the first quarter that bids for open season on Prairie Connector closed March 30 and a 60-day period is underway to determine if there's enough commercial interest to advance the project.

"At the end of this evaluation period, South Bow will provide the results of the open season and, if advanced, indicate the project's potential next steps," the company said. Permits for Keystone XL remain valid on the Canadian side of the border, but it's unclear how it would proceed in the United States.

U.S. President Donald Trump signed an executive order granting a cross-border permit for the co-called Bridger Pipeline that would carry crude oil from Canada into Wyoming. If both make it to the finish line, they would connect.

That project is also led by South Bow, along with its U.S. partner Bridger Pipeline.

What About the U.S.-Canadian Trade Disputes?

More options to deliver crude oil to the United States, however, could run counter to efforts from Canadian Prime Minister Mark Carney to halve the amount of U.S. trade given Trump's position on bilateral relations so far in his second term. Carney, however, had raised the issue during meetings earlier this year with the U.S. president.

In March, however, the provincial government of oil-rich Alberta outlined a spending wish list as part of its annual budget proposal, earmarking US$5.2 billion for local infrastructure needs, including roads, and said it was committing C$11 million over the next two years to support the planning for a proposed crude oil pipeline to British Columbia.

The Trans Mountain network is currently the only midstream network capable of delivering Canadian crude oil outside of North America. An expansion project completed in May 2024 nearly tripled the capacity on the pipeline system to a total of 890,000 bpd.

In the Atlantic, meanwhile, the Bay du Nord project, steered by Norwegian energy major Equinor, would be the first deep-water facility of its kind for Newfoundland and Labrador, which enjoys strong trade ties to the European economies given its geographic position.

Key Takeaways

• U.S.-Canadian pipeline options come amid trade disputes
• Canadian permits for Keystone XL remain valid

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