A subsidiary of Canadian gas company TC Energy, South Bow, has began trading on the Toronto Stock Exchange (TSX).
South Bow is now assisting its parent company in decreasing its debt load and focusing on natural gas, with its main asset being the 622,000 barrels per day (bpd) Keystone Pipeline from Canada to the US.
TC Energy’s shareholders have received a singular share in South Bow for every five they own in TC Energy.
South Bow’s pipeline transports Canadian crude oil from Alberta to the US Midwest and Gulf Coast, and features 4,900km of infrastructure.
For the foreseeable future, explained Martin Cobb, senior vice-president of equities for Lorne Steinberg Wealth Management (which holds shares in South Bow), South Bow will focus on maximising operations with its existing assets and returning cash to shareholders.
Canada is the world’s fourth-largest crude oil producer and, according to Offshore Technology’s parent company, GlobalData, produced 4.35 million barrels per day in 2023.
Output from Northern Alberta’s oil sands also hit record highs last year due to the expansion of the Trans Mountain project, which competes with Keystone for customers.
Analysts have argued that South Bow’s higher-than-average dividend yield can help offset investor concerns about TC Energy’s high debt load. In addition to this, the Keystone pipeline is also seen as substantial source of revenue.
