Enbridge Inc. announced that it has entered into a definitive agreement with KKR to form a new joint venture, subject to the satisfaction of customary closing conditions, led by capital accounts advised by KKR, in collaboration with funds and affiliates managed by Apollo.
Deal to fund Westcoast expansion projects
The joint venture will fund the previously sanctioned Aspen Point and Sunrise Expansion Programs (collectively, "the Expansions") of the Westcoast natural gas pipeline system. The Expansions have regulatory approval and are commercially underpinned by long-term take-or-pay contracts.
Under the agreement, KKR and Apollo will invest approximately C$2.7 billion to fund the Expansions, including C$0.7 billion of cash to Enbridge at closing, in exchange for an indirect, cumulative 29% interest in the aggregate Westcoast system upon Sunrise entering service. The investors will begin receiving distributions as each expansion project enters service. The Aspen Point Expansion Program is expected to enter service in 2026, followed by the Sunrise Expansion Program, in late 2028.
Enbridge will retain majority ownership and operational control over the Westcoast system, including responsibility for executing the Expansions. Enbridge also has the option to repurchase the investors' interest in the joint venture at any time between the seventh and fourteenth year following close.
Executive commentary
"We are pleased to welcome KKR and Apollo as strategic partners to support the funding of Aspen Point and Sunrise," said Pat Murray, Executive Vice President and Chief Financial Officer. "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 optimization and disciplined capital allocation. With this strategic partnership, we continue our longstanding capital recycling program, which has generated C$19 billion in proceeds since 2014."
"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. We look forward to working with Enbridge to support the continued development of the Aspen Point and Sunrise Expansion Programs."
"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. "We are pleased to collaborate with KKR to provide long-term, flexible capital that supports Enbridge's expansion plans, building on our established track record of supporting leading companies in the energy sector globally."
The transaction is not material to Enbridge's 2026 financial guidance or medium-term financial outlook. A supplemental presentation has been posted to Enbridge's website with more details on the transaction.
Deal advisors
Morgan Stanley Canada Limited acted as lead advisor and TD Securities acted as co-advisor to Enbridge on the transaction. Sullivan & Cromwell LLP and McCarthy Tétrault LLP acted as legal advisors to Enbridge on the transaction.
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CIBC Capital Markets acted as financial advisor, and Kirkland & Ellis LLP and Bennett Jones LLP acted as legal advisors to KKR on the transaction. Scotiabank acted as financial advisor and Milbank LLP acted as legal counsel to the Apollo funds.
