Enbridge brings KKR, Apollo into C$2.7 billion Westcoast pipeline expansion

Enbridge formed a C$2.7 billion joint venture with KKR and Apollo Global Management to fund the Aspen Point and Sunrise expansions of its Westcoast natural gas pipeline system in British Columbia, the company said Thursday.

"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," said Pat Murray, executive vice president and chief financial officer at Enbridge.

KKR and Apollo will invest approximately C$2.7 billion, including C$700 million in cash to Enbridge at closing, in exchange for a cumulative 29 percent noncontrolling interest in the Westcoast system once Sunrise enters service. The Aspen Point expansion is expected online in 2026, followed by Sunrise in late 2028. Both projects have regulatory approval and are commercially underpinned by long-term take-or-pay contracts.

The structure lets Enbridge fund growth without increasing corporate debt while retaining majority ownership, operational control and an option to repurchase the stake between the seventh and fourteenth years. The Westcoast system currently moves about 3.6 billion cubic feet per day across roughly 2,900 kilometers; Sunrise will lift capacity to approximately 3.9 Bcf/d, strengthening takeaway routes for Montney gas toward LNG export markets and the U.S. Pacific Northwest.

The transaction extends Enbridge's capital recycling program, which has generated C$19 billion in proceeds since 2014. The company said the deal is not material to its 2026 financial guidance or medium-term outlook.

The investment arrives as federal and provincial governments push to advance major infrastructure projects to spur economic growth and reduce Canada's reliance on U.S. trade. British Columbia has emerged as a major LNG export hub, increasing the strategic value of pipelines capable of moving gas from the Western Canadian Sedimentary Basin toward domestic, U.S. and international markets.

Private capital fills the gap

For KKR and Apollo, the agreement provides exposure to contracted infrastructure cash flows without taking operating control of the underlying asset. "The Westcoast pipeline is an important natural gas transportation system serving customers across Western Canada and North America," said Paul Workman, managing director at KKR. "This investment reflects our strategy of investing alongside leading operators in key infrastructure with stable, long-term cash flows and attractive growth opportunities."

Apollo pointed to growing natural gas demand in British Columbia, the Pacific Northwest and international LNG markets as part of its investment rationale. "Enbridge is one of the largest and most reputable energy infrastructure companies in North America, and the Westcoast Pipeline System is critical to serving growing natural gas demand across British Columbia, the U.S. Pacific Northwest and internationally via LNG," said Jamshid Ehsani, partner at Apollo.

The deal follows a broader pattern of private equity firms deploying capital into contracted energy infrastructure assets, drawn by predictable cash flows and long-duration contracts. For Enbridge, the structure mirrors its approach to monetizing minority stakes in mature assets while retaining the economics of system expansion.

What the expansion delivers

Aspen Point expands the northern T-North portion of Westcoast, while Sunrise extends the T-South corridor through central and southern British Columbia toward the Lower Mainland and the Huntingdon-Sumas connection with the U.S. Pacific Northwest. The projects strengthen takeaway capacity for British Columbia production, including Montney gas, while improving access to Canadian demand, LNG-related markets and customers south of the border.

For contractors and suppliers, Sunrise represents a multi-year construction scope spanning large-diameter pipeline construction, compression, welding, coating, valves, metering, electrical systems, inspection, environmental services, logistics and reclamation. Aspen Point offers a nearer-term opportunity, while Sunrise provides a longer sales runway through 2028.

Morgan Stanley Canada acted as lead advisor and TD Securities as co-advisor to Enbridge. Sullivan & Cromwell and McCarthy Tétrault served as legal advisors. CIBC Capital Markets advised KKR, with Kirkland & Ellis and Bennett Jones as legal counsel. Scotiabank advised Apollo, with Milbank as legal counsel.

The deal remains subject to customary closing conditions.

This article is for informational purposes only and does not constitute investment advice.