6 days ago
Calgary-based South Bow reports increased income despite April pipeline spill
The company that operates the Keystone pipeline says it expects an in-depth report to be available in September on the impact of an April 8 leak near Fort Ransom, N.D.
But Calgary-based South Bow doesn't expect it to reveal any wide-spread problems with the pipeline that runs 4,327 kiolmetres from Hardisty, Alta. to refineries in Illinois, Oklahoma and Texas.
The leak of about 3,500 barrels forced the company to shut the pipeline down for about a week, to allow for cleanup efforts that were completed in early June.
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This image provided by South Bow shows a spill from the Keystone oil pipeline that occurred Tuesday, April 8, 2025 near Fort Ransom, N.D. South Bow via AP
South Bow's chief operating officer Richard Prior said early tests found the source of the failure was a crack on a seam weld but the company will know more once results of the third party root cause failure analysis are out next month.
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'From everything that we've seen so far, we're not seeing evidence that this is a broad systemic issue that we're not going to be able to get our arms around,' said Prior on an earnings call Thursday.
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He said the company should be able to address any issues through the remedial actions it's completing now or will once the analysis is done, along with enhancements to its ongoing integrity program.
The company gave the update as it reported a net income of $96 million U.S. in its second quarter, up from $88 million in the same quarter last year.
Prior said the cost of the spill should total about $60 million U.S., which should be covered by insurance.
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In this photo provided by South Bow, a vacuum truck transfers oil into a storage tank at the scene of a spill of the Keystone oil pipeline that occurred Tuesday, April 8, 2025, near Fort Ransom, N.D. South Bow va AP
South Bow was asked on its earnings call about how the increased talk in Canada of new energy infrastructure, including oil pipelines, could affect the company, but chief executive Bevin Wirzba's answer focused mostly on efforts to add to the company's existing systems.
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'For South Bow, we remain committed to leveraging our pre-invested capital that we have, not only in our Alberta systems, but also in our Gulf Coast section, and we're looking to work with customers to find solutions to provide incremental capacity solutions for them over the next number of years.'
Calgary-based South Bow reported earnings of 46 cents per share in the quarter ending June 30, up from 42 cents last year.
The company had average throughput of 544,000 barrels per day on its Keystone pipeline, and 760,000 barrels per day on the U.S. Gulf Coast segment of the Keystone pipeline system.
With files from Global News.
