By Amanda Stephenson
May 28 (Reuters) – Canadian pipeline operator South Bow needs proof that a U.S. presidential permit is “durable” before proceeding with a partial revival of the Keystone XL oil pipeline, the company’s CEO said on Thursday.
Bevin Wirzba told a crowd at the Energy Roundtable conference in Calgary that his company remains keenly aware of what he called “sovereign risk,” or the possibility that a government unilaterally moves to block or halt the construction of the company’s proposed 550,000-barrel-per-day Prairie Connector crude oil pipeline.
“We lost, historically, a presidential permit across the border,” Wirzba said, referring to the previous Keystone XL project, which was canceled by former President Joe Biden in 2021 after years of environmental and Indigenous opposition.
“So we still need to solve that sovereign risk, and we’re working on that within the United States and Canada.”
South Bow was spun off by former Keystone XL proponent TC Energy in 2024 to take over its oil pipeline business. The company is proposing, with U.S. partner Bridger Pipeline, to construct a new Alberta-to-Wyoming pipeline that would use some of the already-installed Keystone XL pipe on the Canadian side of the border.
CANADIAN OIL EXPORTS TO U.S. COULD JUMP
U.S. President Donald Trump signed an order in April granting a cross-border permit to Prairie Connector, which could increase Canada’s crude exports to the U.S. by more than 12%.
TC Energy lost billions when Keystone XL was cancelled, and U.S. legislators have since been working to reduce the risk political reversals pose to energy companies and projects.
One bill, which has not yet become law, would explicitly prohibit a president from revoking cross-border pipeline permits without congressional approval.
This and other developments are positive steps, but do not yet provide “complete durability” for the South Bow project’s permit, Wirzba said.
Reuters reported this month that South Bow is close to securing the minimum commitments it needs from Canadian oil shippers to proceed with the pipeline. The company is expected to announce the results of that commercial process soon.
While the pipeline is fully permitted in Canada, state regulatory permits are still required.
South Bow in May said it had begun work to secure regulatory approvals along the U.S. route of the proposed pipeline.
(Reporting by Amanda Stephenson in Calgary and Katha Kalia and Dharna Bafna in Bengaluru; editing by Alan Barona, Rod Nickel)
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