Canada's Enbridge and KKR Form C$2.7 Billion Joint Venture to Expand Westcoast Pipeline

en.Wedoany.com Reported - Enbridge and KKR have reached an agreement to form a joint venture to fund the Aspen Point and Sunrise expansion projects of the Westcoast natural gas pipeline system in British Columbia (BC), Canada.

The total investment is approximately C$2.7 billion, led by KKR, together with funds and affiliates managed by Apollo, subject to customary closing conditions.

Upon completion of the transaction, KKR and Apollo will indirectly hold an aggregate 29% equity interest in the Westcoast system once the Sunrise expansion project becomes operational. Additionally, Enbridge will receive C$700 million in cash at closing. Distributions to the two investors will commence after each expansion project is completed and placed into service.

Paul Workman, Managing Director at KKR, stated that the Westcoast pipeline is a critical natural gas transportation system serving customers across Western Canada and North America. This investment aligns with the firm's strategic focus on investing in critical infrastructure, which typically offers stable long-term cash flows and growth potential. KKR looks forward to partnering with Enbridge to support the advancement of the Aspen Point and Sunrise expansion projects.

The Aspen Point expansion project is expected to be placed into service in 2026, while the Sunrise expansion project is targeted for late 2028. Both projects are underpinned by long-term take-or-pay contracts and have previously received formal approval and passed regulatory review.

The Westcoast pipeline system currently has a delivery capacity of 3.6 billion cubic feet of natural gas per day, which is expected to increase to 3.9 billion cubic feet per day once the Sunrise expansion project becomes operational. The pipeline spans more than 2,900 kilometers, connecting Fort Nelson and Gordondale in northeastern British Columbia, as well as the Canada-U.S. border at Huntingdon/Sumas.

Enbridge will retain a majority interest in the Westcoast system and maintain operational control and oversight of the expansions. The company also holds an option to repurchase the joint venture interests between the 7th and 14th years following closing of the transaction.

Pat Murray, Executive Vice President and Chief Financial Officer at Enbridge, said this partnership brings in KKR and Apollo as strategic funding partners for the Aspen Point and Sunrise expansion projects, helping the company recycle capital, maintain financial flexibility, and advance high-return growth projects. He also noted that Enbridge has generated C$19 billion in cumulative proceeds through its capital recycling program since 2014. The transaction has no material impact on Enbridge's 2026 financial guidance or medium-term outlook.

Advisors for the transaction include: Morgan Stanley Canada and TD Securities serving Enbridge, with Sullivan & Cromwell and McCarthy Tétrault as legal counsel; KKR received financial advice from CIBC Capital Markets, with Kirkland & Ellis and Bennett Jones acting as legal counsel; Apollo funds were advised by Scotiabank, with Milbank serving as legal representative.

The Government of Canada approved the C$4 billion Sunrise expansion project in April 2026.