Enbridge Inc. has recently announced a partnership with KKR and Apollo to establish a joint venture aimed at supporting the expansion of its Westcoast natural gas pipeline system. The agreement entails an investment of approximately $2.7 billion from KKR and Apollo to finance 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 obtain a 29% interest in the overall Westcoast system once the Sunrise expansion project commences operations. Enbridge has disclosed that the investors will start receiving returns as each expansion project comes online, starting with the Aspen Point expansion slated for this year, followed by Sunrise in late 2028.
Despite the partnership, Enbridge will retain majority ownership and operational authority over the West Coast system, maintaining oversight of the expansion endeavors. Additionally, the company holds the right to repurchase the investors’ stake in the joint venture anytime between the seventh and 14th year post-closing.
