Enbridge has agreed to form a C$2.7 billion joint venture with KKR-led capital and Apollo-managed funds to finance two major expansions of its Westcoast natural gas pipeline system in British Columbia. The structure gives the investors an indirect, cumulative 29% interest in the aggregate Westcoast system once the Sunrise Expansion enters service, while Enbridge keeps majority ownership and operational control.
The transaction combines long-term private capital with regulated pipeline infrastructure already backed by long-term take-or-pay contracts. It also gives Enbridge C$700 million in cash at closing and reduces the amount of balance-sheet capital it must commit to the Aspen Point and Sunrise projects.
Key Overview
- KKR and Apollo will invest about C$2.7 billion into the Westcoast expansion program.
- Enbridge will receive C$700 million in cash when the transaction closes.
- The investors will ultimately hold a cumulative 29% indirect interest in the aggregate Westcoast system once Sunrise enters service.
- Enbridge retains majority ownership, operational control and responsibility for delivering the expansions.
- Aspen Point is targeted to enter service in late 2026, followed by Sunrise in late 2028.
- Westcoast capacity is expected to rise from about 3.6 billion cubic feet per day to 3.9 billion cubic feet per day after Sunrise is in service.
A Capital-Light Way to Fund Pipeline Growth
The deal gives Enbridge a way to keep expanding a strategically important gas network without funding the entire program itself. Under the definitive agreement, KKR and Apollo will provide approximately C$2.7 billion for Aspen Point and Sunrise, including C$700 million paid to Enbridge at closing.
That structure is significant because the expansion projects have already received regulatory approval and are supported by long-term take-or-pay contracts. Those contracts generally require customers to pay for reserved pipeline capacity, helping make future cash flows more predictable than projects dependent entirely on commodity prices or spot demand.
For Enbridge, the transaction is another step in a broader capital-recycling strategy. The company says that strategy has generated C$19 billion in proceeds since 2014, allowing it to redeploy capital while preserving financial flexibility. Enbridge also retains an option to repurchase the investors’ joint-venture interest between the seventh and fourteenth year after closing.
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Aspen Point and Sunrise Expand Different Parts of Westcoast
The Aspen Point Program is focused on the northern portion of the Westcoast system and is designed to add up to 535 million cubic feet per day of transportation capacity. Construction began in April 2025, and the project is targeted to enter service in late 2026.
The Sunrise Expansion Program targets the southern part of the network. It includes pipeline looping and additional compression and is expected to add about 300 million cubic feet per day of transportation capacity. The project received federal approval in April 2026 and is targeted for service by late 2028.
Once Sunrise is operating, Enbridge says the overall Westcoast system will be capable of transporting about 3.9 billion cubic feet of natural gas per day, up from about 3.6 billion currently. The system stretches more than 2,900 kilometres through British Columbia to the Canada-U.S. border.
Why Investors Are Interested in Westcoast
For KKR and Apollo, the attraction is a large operating infrastructure network with long-duration contracted revenues and additional growth already under development. KKR has described the investment as fitting its strategy of backing key infrastructure alongside established operators, while the investors will begin receiving distributions as each expansion enters service.
The broader demand backdrop also supports the investment case. Growing LNG exports and data-centre demand are increasing the need for natural-gas infrastructure in the region. Westcoast is positioned between major Western Canadian gas supply and customers across British Columbia, Alberta and the U.S. Pacific Northwest, while also supporting gas flows connected to LNG export growth.
The deal therefore reflects a wider shift in infrastructure finance: asset owners are increasingly bringing in long-term institutional capital to fund expansion while retaining control of strategic networks. For Enbridge, that means growth with less direct capital burden; for KKR and Apollo, it offers exposure to contracted infrastructure cash flows tied to a critical North American energy corridor.
What Comes Next
Closing remains subject to customary conditions. Aspen Point is expected to enter service first, followed by Sunrise in late 2028, and investor distributions will begin as each project becomes operational.
Enbridge has said the transaction is not material to its 2026 financial guidance or medium-term outlook. A parallel transaction release confirms the same funding structure and project timetable, while the larger strategic effect is on funding: Enbridge can advance two major expansions, maintain control of Westcoast and recycle capital into other opportunities while sharing part of the future cash-flow stream with its new partners.
Sources: Enbridge / Reuters / KKR / PR Newswire
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