Canadian energy firm Enbridge has agreed to a definitive deal with private equity firm KKR to create a joint venture supporting the expansion of the Westcoast natural gas pipeline network in British Columbia.

Led by KKR alongside funds managed by Apollo, the strategic agreement will see the investors deploy approximately C$2.7 billion. The deal includes a C$0.7 billion cash payment to Enbridge upon closing. In return, KKR and Apollo will secure an indirect cumulative 29% interest in the aggregate Westcoast system once the Sunrise expansion begins operations.

The joint venture aims to fund two commercially backed projects: the Aspen Point and Sunrise expansion programs. Aspen Point is slated to launch in 2026, followed by Sunrise in late 2028. Investors will receive cash distributions as each phase comes online. Enbridge will retain majority ownership, remain operator of the network and hold a buy-back option for the investors’ stake between years seven and fourteen post-closing.

Pat Murray, Executive Vice President and Chief Financial Officer at Enbridge, 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 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.”

Paul Workman, Managing Director at KKR, added:

“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.”

Jamshid Ehsani, Partner at Apollo, stated:

“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. 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.”

Financial advisory was provided by Morgan Stanley Canada, TD Securities, CIBC Capital Markets and Scotiabank.