Enbridge and KKR have agreed to form a joint venture (JV) to provide funding for the Aspen Point and Sunrise Expansion Programmes of the Westcoast natural gas pipeline system in British Columbia (BC), Canada.
The transaction involves a total investment of approximately C$2.7bn, led by KKR in collaboration with Apollo-managed funds and affiliates, and is subject to customary closing conditions.
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Under the terms of the deal, KKR and Apollo will acquire an indirect, cumulative 29% stake in the Westcoast system upon the Sunrise Expansion entering service.
The investment also includes C$700m in cash to Enbridge at closing.
The two investors will begin receiving distributions as each expansion project is completed and enters service.
KKR managing director Paul Workman said: “The Westcoast pipeline is an important natural gas transportation system serving customers across Western Canada and North America.
“This investment reflects our strategy of investing alongside leading operators in key infrastructure with stable, long-term cash flows and attractive growth opportunities. We look forward to working with Enbridge to support the continued development of the Aspen Point and Sunrise Expansion Programs.”
The Aspen Point Expansion is scheduled to be operational in 2026, with the Sunrise Expansion following in late 2028.
Both projects, which were previously sanctioned, are underpinned by long-term take-or-pay contracts and have received regulatory approval.
The Westcoast pipeline system currently has the capacity to transport up to 3.6 billion cubic feet per day (bcf/d) of natural gas. This is expected to rise to 3.9bcf/d once the Sunrise Expansion begins operations.
The system runs for more than 2,900km, connecting Fort Nelson and Gordondale in north-east BC to the Canada-US border at Huntingdon/Sumas.
Enbridge will maintain majority ownership and operational control of the pipeline system and will be responsible for overseeing the expansion works.
The company also holds an option to buy back the JV interest between the seventh and 14th year after completion of the deal.
Enbridge executive vice-president and chief financial officer Pat Murray said: “We are pleased to welcome KKR and Apollo as strategic partners to support the funding of Aspen Point and Sunrise.
“This transaction allows us to efficiently recycle capital, strengthen our balance sheet and maintain financial flexibility while advancing a strong pipeline of high-returning growth opportunities.
“It also underscores our ongoing commitment to portfolio optimisation and disciplined capital allocation. With this strategic partnership, we continue our long-standing capital recycling programme, which has generated C$19bn in proceeds since 2014.”
According to Enbridge, the transaction does not have a material impact on its 2026 financial guidance or medium-term outlook.
Advisers for the agreement include Morgan Stanley Canada and TD Securities for Enbridge, with legal counsel from Sullivan & Cromwell and McCarthy Tétrault.
KKR received financial advice from CIBC Capital Markets and legal support from Kirkland & Ellis and Bennett Jones. Apollo funds were advised by Scotiabank and represented legally by Milbank.
The Canadian Government approved the C$4bn Sunrise Expansion Programme in April 2026.
