Analysis-South Bow plan to revive parts of Keystone XL needs Trump approval, US oil pipeline links

By Amanda Stephenson

CALGARY, March 2 (Reuters) - A connection led by Canadian institution South Bow to revive parts of the cancelled Keystone XL lipid pipeline could summation Canada's crude exports to the U.S. by much than 12%, if it gets a greenish airy from U.S. President Donald Trump and further links to U.S. refining hubs ‌are built.

The caller connection involves a antithetic way done the U.S. than the erstwhile Keystone XL pipeline task cancelled by erstwhile U.S. President Joe Biden successful 2021 aft ‌years of Indigenous and biology opposition.

South Bow, which was acceptable up by erstwhile Keystone XL proponent TC Energy successful 2024 to instrumentality implicit its lipid pipeline business, is considering reviving immoderate of the enactment that was already built successful ​Alberta and already has each indispensable Canadian permits.

Canadian Prime Minister Mark Carney brought up the pipeline's revival successful a speech with Trump successful October and it could supply him leverage successful upcoming negotiations astir renewing the U.S.-Mexico-Canada (USMCA) commercialized agreement.

Trump - whose tariff wars and annexation threats person strained relations with Canada - has repeatedly called for little lipid prices and galore U.S. refiners beryllium connected the astir 4.4 cardinal barrels per time of exports that Canada sends southbound of the border.

South Bow's imaginable U.S. partner, Bridger Pipeline, precocious filed a connection with Montana regulators that describes the operation of a 645-mile (1,038-km) pipeline - susceptible of ‌transporting up to 550,000 bpd - opening adjacent the U.S.-Canada borderline successful ⁠Phillips County, Montana, and transiting to Guernsey, Wyoming.

But analysts accidental Guernsey is not an extremity marketplace for crude oil, truthful further links would request to beryllium built to transport lipid to refining hubs specified arsenic Cushing, Oklahoma; Patoka, Illinois; and the U.S. Gulf Coast.

The astir credible configuration would beryllium a ⁠new pipeline spanning astir 425 miles from Guernsey to Steele City, Nebraska, wherever it could link to the existing Keystone mainline system, said Matthew Lewis, laminitis of Plainview Energy Analytics. From there, the lipid could determination into underutilized pipelines moving toward Cushing, Patoka and Wood River, Illinois.

It remains unclear, however, who would beryllium consenting to instrumentality connected the hazard associated with that limb of a project.

"The biggest situation successful this program ​in ​a Guernsey-to-Steele City conception is gaining permits, and gathering caller pipeline that would apt look biology litigation tying ​up specified a task up successful court," Lewis said.

South Bow said its ‌proposal could link to downstream pipelines successful the U.S. but declined to remark further. Bridger Pipeline declined to comment.