South Bow Responds to Pipeline Incident at Milepost 171

Rhea-AI Summary

South Bow Corp (TSX & NYSE: SOBO) reported an oil release incident at Milepost 171 of the Keystone Pipeline near Fort Ransom, North Dakota. The incident was detected on April 8, 2025, at 7:42 a.m. CT when control centre systems identified a pressure drop. The pipeline was shut down within two minutes.

The estimated release volume is approximately 3,500 barrels. The company has confirmed that the affected segment has been isolated and the release has been contained. South Bow has implemented emergency response procedures, including:

• Around-the-clock air and environment monitoring
• Site remediation efforts
• Focus on staff and community safety
• Environmental risk mitigation

The company commits to providing ongoing updates through their website at www.southbow.com/incident-response.

Positive

• Quick response time - pipeline shutdown within 2 minutes of leak detection
• Successful containment of the oil release
• Immediate implementation of emergency protocols and monitoring systems

Negative

• 3,500 barrel oil release could lead to significant cleanup costs
• Potential regulatory investigations and fines
• Pipeline shutdown impacts operational revenue
• Possible reputational damage affecting investor confidence

Insights

Energy Infrastructure Expert

This 3,500-barrel oil spill from South Bow's Keystone Pipeline represents a significant operational incident with both immediate and potential longer-term implications. The location at Milepost 171 near Fort Ransom, North Dakota will require substantial remediation efforts, though the company reports the release has been contained.

From an operational perspective, the company demonstrated reasonably efficient response protocols - detecting the pressure drop and completing shutdown within two minutes. This suggests functioning leak detection systems, though the incident still resulted in a material release. The indefinite shutdown of this Keystone segment will impact South Bow's transportation capacity and revenue until operations resume.

Pipeline incidents of this scale typically trigger regulatory investigations from PHMSA (Pipeline and Hazardous Materials Safety Administration) and potential state environmental agencies. South Bow will likely face increased regulatory scrutiny and possible operational requirements before restart authorization is granted. The 3,500-barrel volume, while substantial, falls well below the 2022 Keystone spill in Kansas (approximately 14,000 barrels), suggesting this is a serious but manageable incident by industry standards.

Remediation typically involves multiple phases - immediate containment (already completed), recovery of free product, soil excavation, groundwater monitoring, and site restoration. These processes can extend for months with associated costs and regulatory oversight. The company's focus on environmental monitoring suggests appropriate response measures are underway.

Risk Management Specialist

This pipeline incident creates several financial and reputational exposures for South Bow. Similar mid-sized pipeline spills typically result in remediation costs ranging from $15-30 million, depending on terrain, groundwater impacts, and cleanup complexity. These expenses will impact quarterly results, though the company likely maintains pollution liability insurance that would offset portions of these costs above deductible thresholds.

Regulatory consequences represent a secondary financial exposure. PHMSA civil penalties for pipeline safety violations can reach $239,142 per violation per day, with potential additional penalties from state environmental agencies. More significantly, the agency may impose Corrective Action Orders requiring additional integrity verification on other pipeline segments, potentially creating broader operational constraints.

The market should also consider lost transportation revenue during the shutdown period. While the release has been contained, regulatory approval for restart can take weeks following incidents of this magnitude. Shippers dependent on this capacity may need to seek alternatives at premium rates, potentially straining customer relationships.

From an ESG perspective, pipeline incidents negatively impact environmental metrics and social license to operate. However, the company's rapid response (two-minute shutdown) and transparent communication may mitigate reputational damage if remediation proceeds effectively.

This incident, while material to near-term performance, is unlikely to significantly alter South Bow's long-term financial trajectory assuming no complications in remediation or regulatory response. Investors should monitor upcoming disclosures for shutdown duration, remediation timelines, and potential regulatory requirements beyond the affected segment.

CALGARY, Alberta, April 09, 2025 (GLOBE NEWSWIRE) -- South Bow Corp. (TSX & NYSE: SOBO) (South Bow or the Company) has shut down the Keystone Pipeline (Keystone) and is actively responding to an oil release at Milepost 171 (MP-171) of Keystone, near Fort Ransom, North Dakota.

Aligned with incident protocols, South Bow initiated a shutdown and response at approximately 7:42 a.m. CT on April 8, 2025, after control centre leak detection systems detected a pressure drop in the system; the system was shut down at 7:44 a.m. CT on April 8, 2025. The affected segment has been isolated, and the release has been contained. The estimated release volume is approximately 3,500 barrels.

Onsite staff, the surrounding community, and mitigating risk to the environment are South Bow's primary concern. Upon activating emergency response procedures, South Bow established around-the-clock air and environment monitoring. The Company's response efforts focus on remediating the site.

South Bow will continue providing timely updates as information becomes available. Updates will be made available on South Bow's website at www.southbow.com/incident-response.

Forward-looking information and statements

This news release contains certain forward-looking statements and forward-looking information (collectively, forward-looking statements), including forward-looking statements within the meaning of the "safe harbor" provisions of applicable securities legislation, that are based on South Bow's current expectations, estimates, projections, and assumptions in light of its experience and its perception of historical trends. All statements other than statements of historical facts may constitute forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as, "anticipate", "will", "expect", "estimate", "potential", "future", "outlook", "strategy", "maintain", "ongoing", "intend", and similar expressions suggesting future events or future performance. In particular, this news release contains forward-looking statements, including with respect to response efforts, notification and forthcoming updates regarding the oil release, and regulatory, landowner, and customer engagement.

The forward-looking statements are based on certain assumptions that South Bow has made in respect thereof as at the date of this news release regarding, among other things: oil and gas industry development activity levels and the geographic region of such activity; that favourable market conditions exist and that South Bow has and will have available capital to fund its capital expenditures and other planned spending; prevailing commodity prices, interest rates, inflation levels, carbon prices, tax rates, and exchange rates; the ability of South Bow to maintain current credit ratings; the availability of capital to fund future capital requirements; future operating costs; asset integrity costs; that all required regulatory and environmental approvals can be obtained on the necessary terms in a timely manner; and prevailing regulatory, tax, and environmental laws and regulations.

Although South Bow believes the assumptions and other factors reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that these assumptions and factors will prove to be correct and, as such, forward-looking statements are not guarantees of future performance. Forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual events or results to differ materially, including, but not limited to: the regulatory environment and related decisions and requirements; the impact of competitive entities and pricing; reliance on third parties to successfully operate and maintain certain assets; the strength and operations of the energy industry; weakness or volatility in commodity prices; non-performance or default by counterparties; actions taken by governmental or regulatory authorities; the ability of South Bow to acquire or develop and maintain necessary infrastructure; fluctuations in operating results; adverse general economic and market conditions; the ability to access various sources of debt and equity capital on acceptable terms; and adverse changes in credit. The foregoing list of assumptions and risk factors should not be construed as exhaustive. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from the results implied by forward-looking statements, refer to South Bow's annual information form dated March 5, 2025, available under South Bow's SEDAR+ profile at www.sedarplus.ca and, from time to time, in South Bow's public disclosure documents, available at www.sedarplus.ca, www.sec.gov, and on South Bow's website at www.southbow.com.

The forward-looking statements contained in this news release speak only as of the date hereof. South Bow does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws. All forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Contact information
Investor Relations	Media Relations & Community Enquiries
Martha Wilmot	Solomiya Lyaskovska
investor.relations@southbow.com	communications@southbow.com

FAQ

How many barrels of oil were released in the South Bow (SOBO) pipeline incident on April 8, 2025?

The estimated release volume from the Keystone Pipeline incident was approximately 3,500 barrels.

How quickly did South Bow (SOBO) respond to the North Dakota pipeline leak?

South Bow detected the leak at 7:42 a.m. CT and shut down the pipeline by 7:44 a.m. CT on April 8, 2025 - within two minutes of detection.

What immediate actions did South Bow (SOBO) take after the Keystone Pipeline incident?

South Bow isolated the affected segment, contained the release, established 24/7 air and environment monitoring, and initiated site remediation efforts.

Where exactly did the South Bow (SOBO) pipeline incident occur?

The incident occurred at Milepost 171 of the Keystone Pipeline, near Fort Ransom, North Dakota.