South Bow Inc. (TSX: SOBO) is partnering with Bridger Pipeline LLC to build a crude oil pipeline stretching from Guernsey, Wyoming to the key U.S. hub of Cushing, Oklahoma, the Canadian midstream energy firm announced in an emailed statement Tuesday, expanding its North American network and bolstering long-term cash flow prospects.
The project will be developed along a corridor acquired from an unnamed third-party operator, according to the announcement. Joint project teams from both companies are currently finalizing engineering and logistics details, with additional updates to be released as development milestones are met. Engagement with landowners and local communities along the proposed route has been designated as the top priority in the project’s initial phase.
The Guernsey-Cushing segment serves as a critical downstream extension of the pair’s broader Prairie Connector initiative, a proposed cross-border pipeline that would transport crude from Alberta, Canada to Guernsey. If fully built out, the end-to-end corridor would lift Canadian crude export capacity to the U.S. by more than 12%, helping ease persistent takeaway bottlenecks that have long weighed on Western Canadian producer pricing.
Industry analysts have widely noted that Guernsey lacks sufficient end-market refining depth, making the link to Cushing — the U.S. oil industry’s primary storage, pricing and refining hub — essential to unlocking the cross-border line’s full commercial value. The new segment will create a direct, seamless pathway for Canadian crude to reach major U.S. midcontinent refining complexes, improving market access and pricing optionality for shippers.
For South Bow, the partnership adds another high-impact growth lever to a portfolio already prized by income investors for its stable, contracted revenue profile. Shares of the Calgary-based company have rallied 47% over the past 12 months, giving it a market capitalization of roughly CAD 11 billion. At current prices, the stock offers a 5.2% dividend yield, ranking among the more attractive payouts in the North American midstream space.
The share price gains have been underpinned by consistent operational reliability and disciplined financial management. In the first quarter of 2026, South Bow’s flagship Keystone Pipeline system delivered average throughput of approximately 616,000 barrels per day while maintaining a strong 95% system operating factor. Normalized EBITDA reached US$257 million for the quarter, in line with consensus analyst estimates.
For full-year 2026, the company has issued guidance for normalized EBITDA of approximately US$1.03 billion, with a ±2% tolerance band. Roughly 90% of its annual revenue is secured under long-term take-or-pay contracts, sharply insulating its earnings from swings in commodity prices.
Near-term growth is already materializing. South Bow recently placed its Blackrod Connection Project into commercial service, which is on track to contribute nearly US$10 million in normalized EBITDA in 2026.
Looking ahead, management has signaled it will continue pursuing organic value-chain expansion opportunities within existing infrastructure corridors while upholding a strict capital allocation framework. The Bridger pipeline partnership, once completed, will extend South Bow’s network reach deeper into the U.S. midcontinent, strengthening its durable cash flow profile and supporting steady, sustainable shareholder returns over the long run.
