Canada's Enbridge and KKR Sign Deal to Form C$2.7 Billion Pipeline Joint Venture

en.Wedoany.com Reported - On August 27, Enbridge and KKR signed a definitive agreement to form a new joint venture, led by accounts advised by KKR, with funds and affiliates managed by Apollo participating. KKR and Apollo will invest approximately C$2.7 billion in the Aspen Point and Sunrise expansions of the Westcoast natural gas pipeline system, with the transaction subject to customary closing conditions. Both expansions have received regulatory approval and are supported by long-term take-or-pay contracts.

Under the agreement, the C$2.7 billion investment includes approximately C$700 million in cash paid to Enbridge at closing. In exchange, the investors will receive an aggregate 29% indirect interest in the Westcoast system once the Sunrise expansion is operational, with distributions commencing following the in-service date of each expansion. Enbridge will retain majority ownership and operational control of the Westcoast system and will oversee the execution of both expansions. The agreement also grants Enbridge an option to repurchase the investors' joint venture interest between the 7th and 14th years following the transaction's completion.

The Aspen Point expansion, located on the T-North segment of the Westcoast pipeline, commenced construction in April 2025. The project includes approximately 18 kilometers of new pipeline, electric-driven compression and transmission lines, a new metering station, and upgrades to existing compressor stations. This includes approximately 9 kilometers of 24-inch Aitken Creek pipeline loop, approximately 8 kilometers of 36-inch Fort St. John Mainline loop, and approximately 1 kilometer of 30-inch connecting pipeline. The project is expected to be in service in the fourth quarter of 2026, adding up to 535 million cubic feet per day of natural gas transmission capacity.

The Sunrise expansion received approval from the Government of Canada in April 2026, with construction commencing in July. The total investment is approximately C$4 billion. The project will construct 11 pipeline loops along the T-South segment of the Westcoast pipeline, totaling approximately 139 kilometers, add compression facilities at four existing compressor stations, and build approximately 10 kilometers of transmission lines. The project is designed to add 300 million cubic feet per day of transmission capacity, with a target in-service date of late 2028.

The Westcoast natural gas pipeline system spans more than 2,900 kilometers, extending south from Fort Nelson in northeastern British Columbia and Gordondale near the British Columbia-Alberta border to the Huntingdon/Sumas Canada-U.S. border. The system currently has natural gas transmission capacity of up to approximately 3.6 billion cubic feet per day, which Enbridge expects to increase to 3.9 billion cubic feet per day once the Sunrise expansion is in service.