CALGARY — South Bow’s proposed southbound pipeline using leftover steel laid for the cancelled Keystone XL project has cleared a major hurdle, with the company announcing Friday that it has secured sufficient commitments from oil producers to proceed. 

The news comes about a month after U.S. President Donald Trump signed a presidential permit allowing South Bow’s U.S. partner, Bridger Pipeline, to develop the cross-border project.

“We have really strong signals from both the United States and Canada that this is a project that would be supported by both of those administrations,” South Bow chief executive Bevin Wirzba said on a recent episode of the Trevor Rose podcast.

The company said Wirzba was unavailable for an interview when asked on Friday.

The Calgary-based pipeline company, a spinoff of TC Energy, said it’s still a year away from making a final investment decision on the project dubbed “Prairie Connector,” which would initially deliver around 450,000 barrels of oil per day into U.S. markets in the Midwest and Gulf Coast. 

The project proposing to use pipe and pump stations built for the abandoned Keystone XL project has been in development since last August, after oil producers began signalling in earnest a willingness to grow after years of uncertainty, Wirzba said.

Prairie Connector is expected to follow a significantly different path than Keystone XL, which TC officially abandoned in 2021 after being twice rejected by successive U.S. administrations. Regulatory filings describe a roughly 1,000-kilometre pipeline traversing the southwest corner of Saskatchewan to the Canada-U.S. border near Phillips County, Mont., and extending to an oil hub in Wyoming. The pipeline would then link up to existing lines, including South Bow’s Marketlink pipeline, to move Canadian crude to the Gulf Coast.

Wirzba has said that the decision to partner with a U.S. pipeline company that would obtain presidential permits provides more “durability” to the new project. 

“We believe that it would be easier for a future administration to take away a Canadian presidential permit request versus it coming from an American company,” Wirzba said on the podcast.

Reuters reported earlier this month that producers including Canadian Natural Resources Ltd., Cenovus Energy, Tamarack Valley, Whitecap Resources and Strathcona Resources had made commitments to move crude through South Bow’s Prairie Connector. 

The southbound pipeline project is pushing ahead as public debate ratchets up over Alberta’s proposed million-barrel-a-day pipeline to the West Coast.

The Alberta and federal governments have argued the West Coast route provides market diversification for Canadian exports and reduces the country’s reliance on the U.S.

There are clear trade-offs going either direction, said Tristan Goodman, president of the Explorers and Producers Association of Canada.

“It’s less expensive to go south. It’s a known quantity going south,” Goodman said. “It’s very challenging building across mountains, going west. It’s expensive, but it has significant diversification benefits.”