A long-delayed push to move more Canadian crude into the United States is back on the table, and this time it has barrels behind it.
Oil companies have committed at least 400,000 barrels per day to the project, or about 72% of its initial 550,000 bpd capacity. South Bow Corp. and Bridger Pipeline are targeting roughly 450,000 bpd in long-term contracts, a level that is typically required before construction proceeds.
That demand tells you everything about the current bottleneck. Canada is producing about 5.5 million bpd and heading toward 6.1 million bpd by 2030.
Top shippers tied to the project include Cenovus Energy and Canadian Natural Resources, alongside Tamarack Valley, Whitecap Resources, and Strathcona Resources. None are commenting publicly, which is standard when contracts are still being finalized.
The project would reuse roughly 150 km of idle pipe on the Canadian side and connect to a new 645-mile system through Montana to Guernsey, Wyoming. From there, crude still needs a way to reach real demand centers like Cushing or the Gulf Coast.
President Donald Trump has already signed a cross-border permit for the project, reversing course from 2021, when the Keystone XL permit was scrapped.
The proposed system could eventually move up to 1.13 million bpd, putting it in the same league as major export arteries. The price tag is around $2 billion.
Pipeline constraints have dogged Canadian producers for years. Enbridge is adding 150,000 bpd through expansions set for 2027 and is studying another 250,000 bpd phase. Trans Mountain is also looking at boosting capacity further after its recent expansion tightened Western Canadian discounts.
Tudor Pickering Holt analyst AJ O’Donnell called the project the most logical approach to adding egress capacity through the end of the decade. The market is signaling the same thing.
By Julianne Geiger for Oilprice.com
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