Canada's South Bow Corp. announced Friday it has secured the necessary multi-year shipper commitments to advance its proposed Prairie Connector pipeline, a project that would partially revive the canceled Keystone XL route.

The proposed 550,000-barrel-per-day pipeline, developed alongside U.S. partner Bridger Pipeline, would stretch from Alberta to Wyoming. If built, it could boost Canadian crude exports to the U.S. by 12%, providing critical pipeline capacity for Canada, the world's fourth-largest oil producer.

South Bow, which spun off from original Keystone XL developer TC Energy in 2024, confirmed it secured 20-year binding contracts from oil companies.

While the company did not disclose the total volume, industry sources previously indicated South Bow was targeting commitments for 450,000 barrels per day, or 80% of the pipeline's initial capacity.

The Prairie Connector would diverge from the original U.S. route of Keystone XL—which was killed in 2021 when former President Joe Biden revoked its permit—but it would utilize infrastructure and pipe already assembled on the Canadian side of the border.

Despite securing commercial backing and receiving a fresh cross-border permit from U.S. President Donald Trump, political risk remains the project's primary hurdle, even as the final investment decision is expected by mid-2027.

South Bow Chief Executive Bevin Wirzba noted that the company will not proceed without assurances that the U.S. permit is "durable" and shielded from revocation by a future administration.

Industry analysts emphasize that this regulatory uncertainty could paralyze the project.

"Without assurances that a new U.S. administration would not revoke the permits in 2029, as Biden did with KXL, the project is likely to be stalled," said AJ O'Donnell, an energy analyst at TPH Energy.

While South Bow has not released an official budget, ATB Capital Markets analysts estimate the Prairie Connector could cost $2.2 billion ($3 billion Canadian), with construction expected to take two to three years once a final investment decision is made.