Carney knew of South Bow's Keystone XL plans before White House meeting, source says
24/02/2026 23:37
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Carney was aware of South Bow's Keystone XL revival plans
when
he discussed pipeline with Trump
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South Bow considers reviving parts of Keystone XL pipeline
in
expansion project
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Carney asked Trump in October if he would be interested in
reviving Keystone with Canadian support
(Adds context and details in paragraphs 3-4, 17-25)
By Amanda Stephenson
CALGARY, Feb 24 (Reuters) - Canadian Prime Minister Mark
Carney was aware of oil company South Bow's plans to revive
parts of the canceled Keystone XL pipeline expansion to the
United States when he floated the idea to U.S. President Donald
Trump in October, a federal government source familiar with the
matter said on Tuesday.
South Bow SOBO.TO , the Canadian pipeline company behind the
canceled Keystone XL pipeline, is considering reviving some of
the already-built line in an expansion project in Alberta aimed
at transporting more Canadian oil to the United States, the
source said.
A South Bow spokesperson said the company, which took over
Keystone XL assets from TC Energy TRP.TO after the project was
canceled by President Joe Biden, was evaluating an expansion to
leverage existing infrastructure and permitted corridors in
Canada, but did not say if that would include Keystone XL. The
expansion proposal is still at a very preliminary stage, the
spokesperson said.
According to estimates by Bridger Pipeline, a potential South
Bow partner on the U.S. side, it could increase Canada's oil
exports to the U.S. by about 12.5%. That would give Carney
greater leverage in upcoming negotiations over the Canada-United
States-Mexico (CUSMA) trade agreement.
During Carney's October meeting at the White House, he raised
with Trump the prospect of reviving the Keystone XL oil pipeline
from Alberta to the United States as part of his efforts to ease
trade tensions between the two countries.
CARNEY FACES PRESSURE FROM U.S. TARIFFS
Carney, who was under increasing pressure in Canada to address
painful U.S. tariffs on steel, autos and other goods, asked
Trump if he would be interested if the Keystone project were to
be revived and had Canadian support, Reuters reported in
October.
At that time, South Bow said it had "moved on" from Keystone but
was supportive of efforts to increase the transportation of
Canadian oil. Carney was aware, however, that South Bow was in
talks with potential U.S. partners to resurrect part of the old
Keystone XL line, the source told Reuters.
"He certainly was aware that there would be some
private-sector interest," the source said. The source declined
to be named in order to speak freely about the matter.
The Canadian government is not involved in any way with the
South Bow proposal, the source said, but added that energy in
general will be an important part of negotiations during the
upcoming CUSMA review.
A spokesperson for Carney's office declined to comment,
referring questions to Canada's Department of Natural Resources.
Natural Resources spokesperson Charlotte Power, in an emailed
reply to a Reuters query, said: "Canada is an energy superpower,
and we have what the world wants.
"As the federal government prepares for the CUSMA review, we
are actively engaging with industry leaders and provinces and
territories to ensure our negotiating position reflects Canada's
economic interest."
BRIDGER FILES PIPELINE PROPOSAL WITH REGULATORS
Bridger Pipeline recently filed a proposal with Montana
regulators that describes the construction of a potential
645-mile (1,038-km) pipeline beginning near the U.S.-Canada
border in Phillips County, Montana, and transiting to Guernsey,
Wyoming.
Much of the new pipe would be built in locations alongside
existing pipeline infrastructure owned by Bridger and other
operators, the application states.
The purpose of the new pipeline, it said, would be to transport
up to 550,000 barrels per day of Canadian crude oil to the U.S.
market. Canada exported 4.4 million barrels of oil per day on
average to the U.S. in 2024.
Bridger declined to comment on the application.
South Bow declined to comment on a potential U.S. partner. The
source said the government was aware of discussions between
South Bow and Bridger on the matter before Bridger filed its
application.
RBN Energy analyst Liz Dicken said in a blog post that the only
existing Canadian infrastructure that could be leveraged for a
project of that size is the partially constructed Keystone XL
system in Alberta, which has sat idle since the pipeline's
cancellation in 2015.
Dicken also pointed out that Guernsey, Wyoming, is not an
end-market for crude oil, so additional downstream links would
need to be built to transport oil to refining hubs such as
Cushing, Oklahoma, Patoka, Illinois, and the U.S. Gulf Coast.
Keystone XL was a proposed crude pipeline roughly
1,900-kilometres (1,181 miles) long that would have carried
830,000 barrels per day of oil from the oil sands of northern
Alberta through the Dakotas and Nebraska to the major U.S.
storage hub at Cushing, Oklahoma, and then to Gulf Coast
refineries.
TC Energy first proposed the project in 2008 but it quickly
attracted significant environmental and Indigenous opposition.
It was rejected by President Barack Obama's administration and
then revived during Trump's first term, only to be canceled
again by Biden in 2021.
TC Energy lost billions on the project and set up South Bow
as a new company to take over its oil pipeline business. No
significant Keystone XL infrastructure was built within the
United States before the halt.
(Reporting by Amanda Stephenson in Calgary; Editing by Caroline
Stauffer and Edmund Klamann)
((mailto:edmund.klamann@thomsonreuters.com;))