Enbridge Inc. and KKR have agreed to form a joint venture to fund expansion of the Westcoast natural gas pipeline system in British Columbia.

Under the agreement, capital accounts advised by KKR, together with funds and affiliates managed by Apollo, will invest about $2.7 billion (Can.) to fund the previously sanctioned Aspen Point and Sunrise expansion projects, the companies said in a joint release Aug. 27. The investment includes about $700 million (Can.) in cash to Enbridge at closing.

In exchange, the investors will receive an indirect cumulative 29% interest in the Westcoast system after the Sunrise Expansion Program enters service.

The Westcoast pipeline system transports up to 3.6 bcfd of natural gas, serving customers across Western Canada and North America. Capacity is expected to increase to 3.9 bcfd following completion of the Sunrise project. The system extends more than 2,900 km from northeastern British Columbia and the BC-Alberta border to the Huntingdon-Sumas interconnection at the Canada-US border.

Both expansion projects have received regulatory approval and are backed by long-term take-or-pay transportation contracts.

The Aspen Point Expansion Program, an expansion of the northern section of the Westcoast system, is expected to enter service in 2026. Construction, which includes the installation of pipeline segments, electric driven compressor units with powerlines, and a new meter station, as well as associated compressor station modifications, began in April 2025. 

The Sunrise Expansion Program is scheduled to enter service in late 2028.

Enbridge will retain majority ownership and operational control of the Westcoast system and will remain responsible for executing the expansion projects. The company also holds an option to repurchase the investors' interest in the joint venture between the seventh and fourteenth years after closing.

Pat Murray, Enbridge executive vice-president and chief financial officer, said the transaction will help fund the projects while allowing the company to recycle capital and maintain financial flexibility.