Enbridge has entered into a C$2.7 billion (approximately US$1.94 billion) agreement with KKR and Apollo to finance major expansions of its Westcoast natural gas pipeline system in British Columbia, bringing additional institutional capital into infrastructure serving Canadian, U.S. and international energy markets.
The conversion uses the Aug. 27 exchange rate of approximately C$1 = US$0.7188.
Under the definitive agreement, Enbridge and KKR will establish a new joint venture led by KKR-advised accounts in collaboration with funds and affiliates managed by Apollo. The venture will finance the previously sanctioned Aspen Point and Sunrise Expansion Programs.
The two projects have already received regulatory approval and are commercially supported by long-term take-or-pay contracts.
KKR and Apollo to Invest Nearly $2 Billion
KKR and Apollo will invest approximately C$2.7 billion (US$1.94 billion) to fund the expansion programs, including C$700 million (approximately US$503 million) in cash to Enbridge at closing.
In return, the investors will receive an indirect, cumulative 29% interest in the aggregate Westcoast system once the Sunrise Expansion enters service.
The investors will begin receiving distributions as each expansion project becomes operational. The Aspen Point Expansion Program is expected to enter service in 2026, followed by the Sunrise Expansion Program in late 2028.
Enbridge Retains Majority Ownership and Operational Control
Enbridge will retain majority ownership and operational control of the Westcoast system, including responsibility for executing both expansion programs.
The company will also have the option to repurchase the investors’ interest in the joint venture at any time between the seventh and fourteenth year following the transaction’s closing.
For Enbridge, the structure provides outside capital to fund infrastructure development while allowing the company to maintain control of the underlying pipeline assets.
The transaction also extends Enbridge’s capital recycling strategy, which has generated C$19 billion, or approximately US$13.66 billion, in proceeds since 2014.
Enbridge Chief Financial Officer Pat Murray said the partnership would allow the company to recycle capital, strengthen its balance sheet and preserve financial flexibility while continuing to fund its growth portfolio.
Westcoast Capacity to Rise to 3.9 Billion Cubic Feet a Day
The Westcoast natural gas pipeline is a major component of Western Canada’s energy infrastructure. The system stretches more than 2,900 kilometers from Fort Nelson in northeastern British Columbia and Gordondale near the B.C.-Alberta border south to the Canada-U.S. border at Huntingdon/Sumas.
It can currently transport as much as 3.6 billion cubic feet of natural gas per day. Capacity is expected to increase to approximately 3.9 billion cubic feet per day once the Sunrise Expansion enters service.
Sunrise alone is designed to add approximately 300 million cubic feet per day of transportation capacity, including around 140 kilometers of new pipeline and additional compression infrastructure. Construction began in July and the project remains scheduled to enter service in late 2028.
The Westcoast system supplies natural gas to customers across British Columbia, Alberta and the U.S. Pacific Northwest and also supports flows connected to international LNG markets.
Private Capital Targets Energy Infrastructure
KKR said the investment fits its strategy of partnering with established operators on infrastructure assets characterized by long-term cash flows and growth opportunities.
Apollo highlighted Westcoast’s role in supplying natural gas demand across British Columbia and the U.S. Pacific Northwest, as well as supporting international markets through LNG.
The investment brings together three major players in global infrastructure and alternative assets, while giving Enbridge a way to finance expansion without relinquishing operational control of the Westcoast system.
The company said the transaction is not material to its 2026 financial guidance or medium-term financial outlook and remains subject to customary closing conditions.
Morgan Stanley Canada served as lead adviser to Enbridge, with TD Securities acting as co-adviser. CIBC Capital Markets advised KKR, while Scotiabank served as financial adviser to the Apollo funds.
