**South Bow Cuts Crude Trading Team Amid Pipeline Strategy Shift**
Calgary-based pipeline company South Bow has recently laid off two crude traders as part of a strategic move to increase contracted oil volumes through its pipeline systems. This decision, made on April 4, comes as the company aims to streamline its operations and adapt to changing market conditions following the launch of the Trans Mountain pipeline in Canada, which has reduced trading opportunities.
South Bow, which was established as a separate entity from TC Energy in October 2024 to alleviate the latter’s debt burden, has seen its crude trading team shrink from five to just two members. Prior to this, TC Energy had already reduced the team by one member in June 2023. A spokesperson for South Bow declined to comment on the layoffs.
The company is focusing on generating more stable revenues through contracted shipments, especially after the Trans Mountain pipeline began operations, which CEO Bevin Wirzba noted during a recent investor call. The expansion of this pipeline, which transports crude from Alberta to the Pacific Coast for export, is expected to diminish arbitrage opportunities for South Bow.
In its fourth-quarter earnings report, South Bow projected that its marketing unit’s EBITDA would decline by $30 million in 2025, dropping from $12 million in 2024. However, the overall normalized EBITDA for the company is expected to be around $1.01 billion, slightly down from $1.09 billion in the previous year. The anticipated loss in the marketing unit is attributed to increased pipeline capacity across Canada and uncertainties regarding potential tariffs.
South Bow plans to secure 90% of its EBITDA in 2025 through committed arrangements, which Wirzba emphasized would provide more consistent revenue streams for shareholders. The company operates the Marketlink pipeline system, which has a capacity of 750,000 barrels per day, transporting crude from Cushing, Oklahoma, to the U.S. Gulf Coast via the Keystone pipeline’s Gulf Coast extension. The available spot capacity previously utilized by the trading team will now be redirected to enhance contracted shipments to third-party customers.
As of the latest trading session, South Bow’s stock was priced at approximately $32.30, recovering from a five-month low of $31.10 following a temporary shutdown of the Keystone pipeline due to an oil spill.
**FAQ**
**What prompted South Bow to lay off crude traders?**
South Bow laid off crude traders to streamline its operations and focus on increasing contracted oil volumes through its pipeline systems, especially after the launch of the Trans Mountain pipeline, which has limited trading opportunities.
