Mr. Bevin Wirzba reports

SOUTH BOW SHARES FINDINGS OF ROOT CAUSE ANALYSIS OF MILEPOST 171 INCIDENT

South Bow Corp. and the Pipeline and Hazardous Materials Safety Administration have received the independent third party root cause analysis of the incident that occurred at Milepost 171 (MP-171) of the Keystone pipeline on April 8, 2025, near Fort Ransom, N.D.

Root cause analysis findings

According to the RCA, the characteristics of the MP-171 incident were unique. Both the pipe and welds conformed to industry standards for design, materials and mechanical properties. Additionally, the pipe was transported in accordance with industry standards, and the pipeline was operating within its design pressure at the time of the incident. The RCA identified:

• The failure resulted from a fatigue crack that originated along the pipe's manufactured long-seam weld.
• The seam weld geometry was a primary contributor to the failure, leading to a stress concentration that likely initiated the crack during transportation from the pipe mill, before construction and subsequent operations.
• Multiple in-line inspections had previously been completed on the section of pipe, including three generations of ultrasonic shear wave technology from two different vendors.
• The presence of hydrogen contributed to material brittleness and increased the growth rate of the fatigue crack, which developed during normal operations spanning 15 years.

The RCA is available on PHMSA's website.

"This was a complex set of unique circumstances. We are committed to learning from this incident and are already implementing remedial measures and enhancements across our systems to prevent future incidents," said Bevin Wirzba, South Bow's chief executive officer. "I am grateful to our team for their swift and thoughtful actions during the incident response and cleanup efforts and for their respectful engagement with the community."

Remedial actions

South Bow is actively progressing its remedial actions, with seven in-line inspection runs and 51 integrity digs completed to date. Preliminary results indicate no injurious issues. The in-line inspection process has been modified to address known tool limitations by overlaying data from previous tool runs and implementing improvements in data analysis methods. South Bow will continue to work closely with its in-line inspection technology vendors to advance tool performance and validation, address and resolve tool limitations, and develop new technologies. Additional in-line inspection tool runs and integrity digs are scheduled for 2026 as part of South Bow's comprehensive program to address the findings and recommendations from the RCA investigation.

As part of PHMSA's corrective action order, South Bow has submitted its remedial work plan to the regulator for approval. This plan includes the corrective actions already completed, along with addressing RCA recommendations. As South Bow conducts this remedial work, any findings will be incorporated into the plan and the company's programs to enhance system integrity and ensure safe operations. South Bow is committed to maintaining transparency with its regulators, customers and industry peers throughout this process.

About South Bow Corp.

South Bow safely operates 4,900 kilometres (3,045 miles) of crude oil pipeline infrastructure, connecting Alberta crude oil supplies to U.S. refining markets in Illinois, Oklahoma and the U.S. Gulf coast through its unrivalled market position. It takes pride in what it does -- providing safe and reliable transportation of crude oil to North America's highest demand markets. As an investment-grade entity based in Calgary, Alta,, South Bow's common shares trade on the Toronto Stock Exchange and the New York Stock Exchange under the symbol SOBO.