South Bow Reports Record System Availability in 2024

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South Bow Reports Record System Availability in 2024

TC Energy Corp. spinoff South Bow Corp. has reported a net income of $55 million for the fourth quarter and $316 million for the full year 2024. The company said in a media release the strong results reflect the highly contracted nature of its assets. Revenue and normalized earnings before interest, income taxes, depreciation, and […]

Revenue and normalized earnings before interest, income taxes, depreciation, and amortization (normalized EBITDA) increased relative to 2023 due to significant demand for uncommitted capacity on the Keystone Pipeline in the first quarter of 2024, and strong demand for capacity on the U.S. Gulf Coast segment of the Keystone Pipeline System throughout the year, South Bow said.

The company reported revenue of $488 million and $2.12 billion for the three months and year ended December 31, 2024, respectively.

South Bow said it delivered record system availability with an annual System Operating Factor (SOF) of 95 percent for the Keystone Pipeline due to continued improvements in system reliability. It recorded an annual average throughput on the Keystone Pipeline of approximately 626,000 barrels per day (bpd) in 2024, an increase of 5 percent relative to 2023. Throughput on the U.S. Gulf Coast segment of the Keystone Pipeline System averaged approximately 795,000 bpd, increasing by 15 percent relative to 2023, South Bow said.

Fourth-quarter 2024 throughput on the Keystone Pipeline and the U.S. Gulf Coast segment of the Keystone Pipeline System averaged approximately 621,000 bpd and approximately 784,000 bbl/d, respectively, it said.

South Bow said that about 90 percent of its adjusted EBITDA is secured through agreements with minimal commodity price or volume risks. Nonetheless, demand for uncommitted capacity on the Keystone System is expected to remain low in 2025, as pipeline capacity in the Western Canadian Sedimentary Basin (WCSB) exceeds supply, it said.

Tariffs on energy by the U.S. government and corresponding Canadian counter-tariffs have created economic uncertainty that affects pricing differentials, South Bow noted. This ongoing uncertainty may create challenges for uncommitted capacity on South Bow’s pipeline systems and impact the Marketing segment’s results. Therefore, South Bow’s 2025 forecast does not include the potential effects of sustained tariffs, the company said.

The 2025 forecast estimates normalized EBITDA at approximately $1.01 billion, with a 3 percent variance and around 90 percent secured through committed agreements. South Bow has maintained its long-term normalized EBITDA growth outlook of 2 percent to 3 percent.

South Bow said it plans to invest roughly $110 million, within a 3 percent range, for growth capital expenditures on the Blackrod Connection Project in 2025, with total project costs expected at $180 million. Completion is targeted for early 2026. As of December 31, 2024, $62 million has already been invested in the project, the company said.

Maintenance and capital expenditures are estimated at $65 million, with a 3 percent range, for 2025 as South Bow proactively engages in maintenance activities while demand for uncommitted capacity is expected to be low and continues to invest in information services infrastructure, the company said.

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