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Kuwait Petroleum Corp announced that its subsidiary Kuwait Oil Company has formed a joint venture with Blackstone, Brookfield and KKR to facilitate the lease and leaseback of the crude oil pipeline network for a 20.5-year term featuring a volume-based tariff. The consortium will hold a 49 percent interest in the venture while KOC maintains a 51 percent stake in addition to full ownership and operational control of the 13 pipelines that total approximately 320 kilometres in length, the company said in a statement. This structure will enable the transport of crude oil and refined products from domestic oilfields to export terminals along the Arabian Gulf without interruption.
The agreement is projected to yield $7.85 billion in upfront proceeds upon closing to finance KPC’s capital expenditure requirements, according to the statement. Shaikh Nawaf Saud al-Sabah said, “This transaction sends a powerful signal that Kuwait continues to rise as an attractive destination for global capital, even amid a challenging regional environment.” Al-Sabah, KPC’s deputy chairman and chief executive officer, noted that the initiative forms part of the company’s long-term strategy to enhance production capabilities.
A series of comparable infrastructure fundraisings by other Gulf oil majors have preceded this deal, Reuters reported. Saudi Aramco raised a total of nearly $39 billion through pipeline stake sales and leasebacks between 2021 and 2025, the news agency detailed in an overview of regional transactions. ADNOC secured $4 billion from leasing 18 pipelines in 2019 while Bahrain’s Bapco Energies has also pursued similar asset monetisation, according to the same compilation.
Kuwait’s pipeline network plays an essential role in the country’s oil sector, which saw production rebound to 1.65 million barrels per day in June after earlier cuts prompted by regional events, a source told Reuters. The OPEC member is targeting an increase in output capacity to 4 million barrels per day by 2040 under KPC’s development plan, according to a February report in the Pipeline Journal. Such infrastructure partnerships help align foreign capital with national expansion goals, KPC indicated.
Financial advisers including Centerview Partners, HSBC and JP Morgan supported KPC throughout the transaction process that was initiated prior to February’s geopolitical developments, earlier Reuters coverage indicated. The deal underscores the appeal of Kuwaiti energy assets to leading global investment firms even in a complex operating landscape. KPC emphasised the transaction’s significance as the largest foreign direct investment recorded in the country to date.
