Enbridge Inc. has entered into a partnership with KKR and Apollo to establish a joint venture aimed at financing the expansion of its Westcoast natural gas pipeline system. The agreement involves KKR and Apollo contributing approximately $2.7 billion towards the Aspen Point and Sunrise expansion initiatives, with an initial $700 million cash payment to Enbridge upon closing.
In exchange for their investment, KKR and Apollo will hold a 29% stake in the combined Westcoast system once the Sunrise expansion is operational. Enbridge has stated that the investors will start receiving returns as each expansion project becomes operational, with the Aspen Point expansion scheduled for completion this year, followed by Sunrise in late 2028.
While retaining majority ownership and operational authority over the West Coast system, Enbridge will oversee the expansion projects. Additionally, the company will have the opportunity to buy back the investors’ stake in the joint venture anytime between the seventh and 14th year post-closing.