In a development that could breathe new life into long-dormant Canadian pipeline assets, South Bow Corp. is actively evaluating an expansion of its system that may effectively revive key segments of the canceled Keystone XL project. The catalyst? A major new U.S. pipeline proposal filed last month by Bridger Pipeline LLC that lines up almost perfectly with the idle Canadian infrastructure South Bow now controls.
Bridger Pipeline Expansion LLC (a wholly owned subsidiary of Bridger Pipeline LLC) submitted an application on January 28, 2026, to the Montana Department of Environmental Quality for a 36-inch diameter crude oil transmission line with an initial capacity of 550,000 barrels per day. The 645-mile route would begin near the U.S.-Canada border in Phillips County, Montana — right at the original Keystone XL border crossing location — and run south through multiple Montana and Wyoming counties before terminating at the key Rockies crude hub in Guernsey, Wyoming.
South Bow, which spun out of TC Energy in 2024 and now owns the entire Keystone pipeline network (including the partially built Keystone XL assets in Canada), responded to questions about the proposal with a carefully worded statement: it is “evaluating an expansion that would leverage existing infrastructure and permitted corridors in Canada to connect to pipelines in the U.S.” The company added that the concept is in early stages and it will engage customers, stakeholders, and rights holders before providing further details.
The Map: How This Ties Directly Into Keystone XL Assets
The geography is no coincidence. During the original Keystone XL saga, TC Energy pushed forward with construction on the Canadian side despite U.S. political roadblocks. Segments of 36-inch pipe, a terminal near Hardisty, Alberta, and two pump stations (including at the border) were completed and have sat idle since the project was formally terminated in 2021.
Here’s what the potential combined system looks like:
The red line shows the built-but-idle Keystone XL Canadian segment from Hardisty to the Montana border. The proposed Bridger route (yellow dashed or green/blue in various analyst maps) picks up right there and heads to Guernsey. From Guernsey, analysts at RBN Energy and Plainview Energy see logical extensions — either a new pipeline southeast to South Bow’s existing Keystone system at Steele City, Nebraska, or expansions along the Pony Express corridor — that would ultimately give barrels access to Cushing, Patoka, and Gulf Coast markets.
This setup would create a functional cross-border heavy-oil outlet without ever needing to rebuild the controversial southern U.S. leg of original Keystone XL.
Why This Matters for Alberta — Especially in an Independence Scenario
Alberta’s oil sands producers have been battling takeaway constraints for years, even after the Trans Mountain Expansion came online. A new 550,000 bpd U.S.-bound route would be a game-changer, providing direct access to Midwest and Gulf Coast refineries that are optimized for heavy barrels. That means narrower WCS-WTI differentials, higher netbacks, and support for continued production growth in one of North America’s most prolific resource plays.The timing is notable: Canadian Prime Minister Mark Carney reportedly knew about South Bow’s thinking when he pitched energy cooperation — including possible Keystone XL revival — to President Trump in October 2025. With Trump back in the White House and explicitly pro-pipeline, the regulatory and political headwinds that killed KXL the first time around have shifted dramatically.
For Alberta, this project could be even more strategic if the province pursues greater autonomy or outright independence from Canada. An independent Alberta would have full control over its resource policy and could negotiate directly with Washington on cross-border infrastructure — potentially securing faster approvals, better commercial terms, and fewer Ottawa-imposed delays. The stranded steel already in the ground near Hardisty would give any future Alberta government an immediate head start on world-class export capacity.
Investment Players to Watch
South Bow Corp. (SOBO:CN) — The clearest winner. Any utilization of its idle Canadian KXL assets turns stranded capital into revenue-generating infrastructure. Analysts see this as a low-capex way to expand its U.S. market reach.
Bridger Pipeline LLC — The U.S. developer filing the Montana application. As a private company, it could seek partners, joint ventures, or even an eventual sale to a larger midstream player looking for scale in the Rockies-to-Gulf corridor.
Alberta oil sands producers — Suncor, Cenovus, Canadian Natural Resources, Imperial, and others stand to gain from improved export options and tighter differentials. Watch for long-term shipping commitments that could underpin project financing.
Downstream infrastructure plays — Companies with capacity on Pony Express, Keystone legs to Cushing/Patoka, or Gulf Coast export terminals could see incremental volumes.
The project still faces the usual hurdles — full environmental reviews under Montana’s Major Facility Siting Act and NEPA, a presidential permit for the border crossing, commercial open seasons, and financing. But with existing pipe already in the ground on the Canadian side and strong political tailwinds in Washington, the odds of at least a partial revival look better today than they have in years.
For Alberta’s energy sector — and especially for those watching the province’s evolving relationship with the rest of Canada — this Montana filing is more than just another pipeline proposal. It’s a potential lifeline for stranded assets and a roadmap to new U.S. market access that could reshape Western Canadian crude flows for decades.
Energy News Beat will continue monitoring regulatory filings, South Bow updates, and any open-season announcements. This story is developing rapidly.
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