In short: Used as the private-sector benchmark, not a pick: its Prairie Connector (550,000 bbl/d, expandable to a million) costs "about 15 billion dollars," which at a guessed ~12% target return implies a $9/bbl toll. That $15B (and an $18B ceiling once a West Coast $2/bbl price uplift is allowed for) is the yardstick he holds the $36–43B public pipeline against.
South Bow isn't a pick here — it's his measuring stick. Its Prairie Connector pipeline is the most recent example of a big Canadian pipeline being built with private money, so he uses its economics as the benchmark for what a pipeline should cost: about $15 billion for a line starting at 550,000 barrels a day and expandable to a million, charging producers roughly $9 per barrel to ship, which implies about a 12% return for the owner.
Why that matters: the new government-backed West Coast pipeline is estimated at $36–43 billion. A West Coast barrel fetches about $2 more, which justifies maybe a 20% higher shipping fee, so a private builder could stretch to about $18 billion — not $43 billion. The gap is his evidence that Ottawa is absorbing roughly $25 billion of extra cost created by its own regulations, and will earn about 5% instead of 12% for doing so.
17:03A million barrel a day pipeline, the private sector alternative. We've just had one and that is South Bow, public, has this Prairie Connector, and went to the private sector, the oil producers said hey we want to build this pipeline, and it's initially for 550,000 barrels a day but it could be grossed up to a million. And just to give you an order of magnitude here, that's going to cost about 15 billion dollars to build, and what that results in is that for South Bow to earn a target rate of return, which I'm
In short: Cited as competing capacity — "despite Keystone being built in South Bow… what has the mainline done?" (kept growing to 3.2M bbl/d). Competitor reference, not a stance.
37:06despite the upside of Keystone being built in South Bow, what has the main line done? The main line's gone in 2000
37:14from a million barrels a day to 2 million barrels a day in 15 to 3.2 million barrels right now. And we are continuing to expand it. We have
In short: Held; the Keystone liquids pipeline spun from TC Energy. Pure-play that funds its dividend from cash flow (sustainable) with low capex needs — spun with higher-than-ideal debt. Prairie/Keystone-XL growth "nice to have" only if funded internally, not by equity.
South Bow owns the Keystone crude-oil pipeline system, spun out of TC Energy. Teich likes it because it's a simple, pure-play pipeline that doesn't need much ongoing capital spending, so it can pay its dividend entirely out of cash flow — making that dividend safe. It came out of the spin-off with more debt than ideal. There's a possible growth project (a Prairie connector reviving part of Keystone XL to the US border), but he only wants it if the company can fund it from its own cash — not by selling new shares, which he avoids.
38:01Yeah. No, it's one that we own. We like it. We were very familiar with that asset. We had previously
38:08owned TC and when they spun that out, we really like South Bow. I think the question at the time was it was spun out with a little bit higher debt levels
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