Canada approves Enbridge C$4bn Sunrise gas pipeline expansion in British Columbia
Construction starts July 2026, with late-2028 in-service target; project adds 300 MMcf/d to Westcoast system capacity
Briefing
- •Canada has granted federal approval to Enbridge's C$4 billion Sunrise Expansion, adding 300 million cubic feet per day of capacity to the southern Westcoast pipeline system.
- •The project comprises approximately 139 kilometres of new pipeline across 11 looping segments, additional compression, and upgrades to existing Westcoast facilities.
- •Construction is scheduled to begin in July 2026, targeting a late-2028 in-service date.
- •Enbridge estimates the project will contribute more than C$3 billion to the Canadian economy and employ approximately 2,500 workers during construction.
- •Pipe will be sourced from InterPro Pipe + Steel, a Canadian steel mill, with more than C$52 million already spent on Indigenous business procurement.
- •The expanded capacity is intended to serve residential and industrial gas demand in B.C. As well as LNG export facilities.
Analysis
- →The Sunrise Expansion adds 300 MMcfd of firm takeaway capacity serving B.C. LNG export facilities, directly reducing the bottleneck risk that has kept Western Canadian gas basis differentials wide. Incremental throughput committed to LNG Canada and any future B.C. LNG projects tightens the supply chain between AECO-priced production and export-linked pricing, which is structurally positive for upstream Canadian gas producers with Westcoast system exposure.
- →Enbridge locks in a C$4 billion regulated capital addition with a defined 2028 in-service date, extending its utility-like earnings visibility. The project's regulated cost-of-service structure means cash flows are recoverable through tolls regardless of spot gas prices, reinforcing ENB's dividend coverage and reducing earnings volatility relative to merchant gas infrastructure peers. The Canadian steel sourcing requirement and Indigenous procurement spending also reduce regulatory reversal risk.
Historical Context
- 2023-2025
LNG Canada Phase 1 construction neared completion at Kitimat, creating urgent demand for additional Westcoast pipeline takeaway. The lack of firm transport capacity was the primary constraint preventing upstream B.C. gas production from scaling to fill export volumes, establishing the commercial rationale the Sunrise Expansion now addresses.
- 2018
Trans Mountain and Coastal GasLink faced prolonged federal approval delays under impact assessment requirements, demonstrating that Canadian pipeline approvals carry significant timeline and political risk. Sunrise's approval removes the analogous regulatory overhang for Enbridge's Westcoast system expansion.
