Enbridge Inc. has recently entered into a partnership agreement with KKR and Apollo to establish a joint venture aimed at supporting the growth of its Westcoast natural gas pipeline system. The collaboration involves an investment of approximately $2.7 billion by KKR and Apollo to finance the Aspen Point and Sunrise expansion initiatives, with $700 million to be paid upfront to Enbridge.
In exchange for their investment, KKR and Apollo will acquire a 29% stake in the combined Westcoast system once the Sunrise expansion project becomes operational. Enbridge has outlined that the investors will start receiving returns as each expansion project is completed, starting with the Aspen Point expansion slated for this year, followed by the Sunrise project in late 2028.
While Enbridge will retain majority ownership and operational authority over the West Coast system, including oversight of the expansion efforts, it also holds the option to repurchase the investors’ stake in the joint venture within the seventh to 14th year post-closure.