New Cross-Border Pipeline Proposal Could Leverage Idle Keystone XL Assets
Industry analysts have identified a significant development in North American energy infrastructure: a newly proposed oil pipeline from the Canadian border to Wyoming could potentially utilize existing pipe laid for the cancelled Keystone XL project. This innovative approach could provide a substantial "head start" for the new venture, reducing both construction time and capital expenditures.
Regulatory Filings Reveal Ambitious Pipeline Plans
Recent regulatory submissions in Montana have unveiled that Bridger Pipeline LLC, a private U.S. company, intends to construct a major new pipeline with a capacity of 550,000 barrels per day. The proposed route would originate at the Canada-U.S. border near Phillips County, Montana, though the filings do not explicitly specify the Canadian infrastructure connections.
Analysts from Plainsview Energy Analytics and RBN Energy have noted that the proposed border origin point strongly suggests a potential link to the partially constructed Keystone XL system in Alberta. Liz Dicken, an analyst at RBN Energy, emphasized in a recent analysis that "given the proposed border origin point, the only infrastructure that appears capable of supplying that scale of incremental volume is the partially constructed Keystone XL system in Alberta, which has remained idle since 2021."
Keystone XL's Complicated History
The Keystone XL project, first proposed in 2008, was designed as an expansion of the existing Keystone pipeline system. It would have transported up to 830,000 barrels per day from Alberta to Nebraska, connecting to pipelines serving refineries throughout the U.S. Midwest and Gulf Coast. The project became a contentious political issue in the United States, with its cross-border permit experiencing multiple approvals and cancellations.
TC Energy Corp., which previously owned and operated the Keystone network before spinning off the assets to South Bow Corp., suspended the expansion project in 2021. Despite the cancellation, significant infrastructure had already been constructed on the Canadian side, including miles of unused pipe that remain in place, awaiting potential utilization.
Potential Revival of Idle Infrastructure
South Bow Corp. has declined to confirm reports about a possible revival of Keystone XL assets through this new proposal. However, the company released a statement indicating it is evaluating an expansion that would "leverage existing infrastructure" and permits to connect to pipelines in the United States.
"The concept is in early stages and South Bow will work with prospective customers, stakeholders and rights holders before sharing further details," the company stated, suggesting ongoing discussions about how to maximize the value of their existing assets.
Addressing Canada's Export Capacity Challenges
This pipeline proposal emerges at a critical moment for Western Canadian oil producers, who continue to face persistent challenges with export capacity. Two of Canada's primary export routes—Trans Mountain Corp.'s newly expanded line to the West Coast and Enbridge Inc.'s Canadian Mainline—are currently operating near maximum capacity.
Industry observers note that South Bow has previously explored alternative options to leverage its Keystone XL assets, including a potential connection to Energy Transfer LP's Dakota Access pipeline. Although those specific plans did not advance, analysts report that the company has been transparent with investors about using existing infrastructure to reduce the upfront capital costs associated with new cross-border pipeline projects.
The potential utilization of idle Keystone XL infrastructure represents a pragmatic approach to addressing North America's evolving energy transportation needs while minimizing new construction and environmental impacts.
