A proposed cross-border oil pipeline is approaching the commercial commitments required to move forward, signaling renewed momentum for expanding Canadian crude flows into the United States.
By yourNEWS Media Newsroom
A planned pipeline designed to transport crude oil from Alberta to Wyoming is close to meeting the minimum shipping commitments needed to proceed, according to four sources familiar with the matter cited by Reuters.
The project, led by South Bow Corp in partnership with Bridger Pipeline, would significantly expand Canada’s ability to deliver oil to U.S. markets. If completed, the system could raise Canadian crude exports to the United States by more than 12%, addressing longstanding constraints tied to limited pipeline capacity.
President Donald Trump signed an order last week granting the project a cross-border permit, marking a reversal from 2021 when former President Joe Biden revoked authorization for the Keystone XL pipeline, which had been the most prominent cross-border oil proposal at the time.
Unlike the canceled Keystone XL route, the new proposal would follow a different path through the United States. However, it would incorporate approximately 150 kilometers of pipeline infrastructure already built in Canada but left unused. That segment would connect to a newly proposed line extending through Montana and running roughly 645 miles to Guernsey, Wyoming.
Sources said oil producers have already agreed to ship at least 400,000 barrels per day, representing about 72% of the project’s initial capacity of 550,000 barrels per day. Regulatory filings indicate the system could ultimately scale up to 1.13 million barrels per day.
Project developers are targeting long-term shipping agreements covering approximately 450,000 barrels per day, which would meet the typical threshold of about 80% of initial capacity required before construction can begin.
Among the companies identified by sources as committing volumes are Cenovus Energy and Canadian Natural Resources Ltd, along with Tamarack Valley Energy, Whitecap Resources, and Strathcona Resources. The sources spoke on condition of anonymity due to the confidential nature of shipping agreements.
South Bow declined to confirm specific volumes, stating the project remains in early development and subject to ongoing discussions with stakeholders and regulatory review. Bridger also declined to comment, though it said in a March regulatory filing that the pipeline is being advanced in response to market demand and ongoing commercial negotiations.
Executives in the sector have indicated that industry participation has been constructive. Whitecap Resources CEO Grant Fagerheim said there appears to be sufficient momentum to reach the required thresholds and noted that support from the U.S. administration has been beneficial.
The project comes as Canadian oil production continues to grow. Output stood at approximately 5.5 million barrels per day at the end of January, according to the country’s energy regulator, and could increase to 6.1 million barrels per day by 2030.
Producers have long faced bottlenecks due to insufficient infrastructure to move crude to market, contributing to discounted pricing for Canadian oil. The new pipeline would provide an additional outlet, complementing expansion efforts by other operators.
Enbridge has approved expansions to its Mainline and Flanagan South systems, expected to add 150,000 barrels per day of capacity by 2027. The company is also evaluating a second phase that could add another 250,000 barrels per day by 2028.
Meanwhile, the Trans Mountain pipeline is pursuing upgrades that could increase capacity by up to 360,000 barrels per day, enabling additional exports to the U.S. West Coast and international markets.
Bridger’s proposed pipeline would run alongside existing infrastructure in parts of Montana and Wyoming, a factor that could simplify the permitting process. However, analysts note that Guernsey is not a final destination for crude, meaning further connections would be required to reach major refining centers such as Cushing, Oklahoma, Patoka, Illinois, and the U.S. Gulf Coast.
AJ O’Donnell, an analyst at Tudor Pickering Holt & Co, wrote that the project represents a practical option for expanding export capacity despite uncertainties around final economics.
“While uncertainty remains around the final economics, we believe this represents the most logical approach to adding incremental oil egress capacity through the end of the decade,” O’Donnell wrote.
“Our view is that additional egress is needed regardless of the geopolitical backdrop.”
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