South Bow on track for mid-2027 decision on Prairie Connector investment

South Bow Corp. says it is on track to make a final investment decision on its Prairie Connector project by mid-next year after it secured shipper commitments. 

The proposed project would ship oilsands crude to the Canada-U.S. border and onto U.S. destinations, serving a similar purpose to the previously failed Keystone XL expansion. 

“Achieving commercial success has enabled us to move into the next phase of development as we advance the work required to support a final investment decision, which we are targeting for mid-2027,” South Bow CEO Bevin Wirzba said on the company’s second-quarter earnings call.       

“Over the coming months, we will focus on stakeholder engagement, execution planning, cost refinement, financing, and securing the permit durability needed to support that decision. As we’ve said previously, permit durability remains a key requirement for South Bow.” 

The proposed Prairie Connector project could use dormant pipe previously intended to be used in the defunct Keystone XL expansion project, which was scuttled amid intense environmental and political opposition several years ago. Keystone XL was pursued by TC Energy Corp., which spun off its oil pipeline business to form South Bow in 2024.  

U.S. President Donald Trump has granted a permit to a separate proposal by Bridger Pipeline LLC linking Wyoming to the Canada-U.S. border. That pipeline could link up with Prairie Connector.  

South Bow also announced the outcome of a previously announced “open season” — a formal process to solicit bids from potential customers — for the Prairie Connector proposal. The company said it secured 20-year commitments from nine customers, totalling 465,000 barrels per day.   

Wirzba said the results of the open season were a significant milestone for the company.   

“This demonstrates the value of our corridor, the strength of our market position, and the continued need for additional egress capacity to support growing Western Canadian crude oil production and deliver significant long-term economic benefits,” he said. 

South Bow’s second-quarter results come amid volatile oil prices as the global energy market continues to navigate the war in the Middle East. 

“Performance on the U.S. Gulf Coast segment of the Keystone pipeline system was particularly strong as disruptions to global crude oil trade drove increased demand for connectivity to refining and export markets,” said Richard Prior, South Bow’s chief operating officer.

The company had average throughput of 596,000 barrels per day on its Keystone pipeline during its second quarter and 800,000 barrels per day on the U.S. Gulf Coast segment of the Keystone system.

South Bow reported net income of US$134 million in the quarter, up from US$96 million during the same period a year earlier.   

The Calgary-based pipeline operator says its earnings amounted to 64 cents US per share in the quarter ending June 30, up from 46 cents US last year. 

Revenue during the quarter reached US$546 million, up from US$524 million a year earlier.

This report by The Canadian Press was first published Aug. 6, 2026.

Companies in this story: (TSX: SOBO)