Canadian energy infrastructure giant Enbridge Inc. has agreed to form a joint venture with private equity firms KKR & Co. and Apollo Global Management to invest roughly $1.95 billion (C$2.7 billion) in expanding its Westcoast natural gas pipeline system in British Columbia.

The investment highlights growing interest from asset managers in critical energy infrastructure, driven by surging demand for natural gas to supply liquidity to expanding liquefied natural gas (LNG) export facilities and power data centers across North America.

Under the agreement, KKR and Apollo will fund the construction of two major initiatives: the Aspen Point and Sunrise expansion projects.

In return, Calgary-based Enbridge will receive about $504 million (C$700 million) in upfront cash upon closing while retaining majority ownership and operational control of the natural gas system.

The Westcoast pipeline network spans 2,900 kilometers (1,802 miles) from northeastern British Columbia down to the Canada-U.S. border, serving key markets in Western Canada and the U.S. Pacific Northwest while linking regional producers to global LNG buyers.

The pipeline currently maintains a delivery capacity of 3.6 billion cubic feet of natural gas per day (Bcf/d).

The Aspen Point project will introduce 535 million cubic feet per day (mmcf/d) of added transportation capacity when it enters service in 2026.

The subsequent Sunrise expansion project will supply an additional 300 mmcf/d in British Columbia starting in late 2028, ultimately boosting the total capacity of the Westcoast system to 3.9 Bcf/d.

Both expansion efforts have secured regulatory approval and are backed by long-term, take-or-pay commercial contracts that guarantee steady revenue.

Additionally, Enbridge retains an option to repurchase the investment firms' equity interest in the joint venture at any point between seven and 14 years following the transaction's close.