Kuwait Oil Company signs $16 billion pipeline lease deal with global investor consortium

Kuwait Petroleum Corporation (KPC) announced Saturday that its wholly owned subsidiary, Kuwait Oil Company (KOC), has signed a $16 billion lease-and-lease-back agreement involving its entire domestic and export pipeline network with a consortium of international infrastructure and institutional investors led collectively by Blackstone, Brookfield and KKR.

 In a statement, KPC said that as part of the transaction, a newly formed Kuwaiti-incorporated JV will lease from KOC the usage rights to all of its 13 pipelines, spanning a total of approximately 320 kilometres of Kuwait's pipeline network.

Under the terms of the agreement, the JV will grant back to KOC the exclusive use, operational and maintenance rights in the pipeline assets for a 20.5 year period, in exchange for a volume-based tariff.

KOC and the consortium, comprising Blackstone, Brookfield and KKR, will establish the new joint venture, with KOC holding a 51 % majority stake and the consortium collectively holding the remaining 49 %, with equal stakes and on equal terms.

KOC will continue to maintain full ownership and operational control of the pipeline network. The JV will not impose any restrictions on Kuwait's refining throughput or production volumes, all of which remain subject to decisions made by the State of Kuwait.

The JV is expected to generate upfront proceeds of $7.85 billion for KOC upon closing, supporting KPC's capital expenditure plans, including KPC's target of 4 million barrels per day of crude oil production capacity by 2035.

Shaikh Nawaf Saud Al-Sabah, Deputy Chairman and CEO of KPC, said, "Project Peregrine represents the largest foreign direct investment in Kuwait's history and a defining milestone for our country's economic development."

He stressed that this transaction sends a powerful signal that Kuwait continues to rise as an attractive destination for global capital, even amid a challenging regional environment.

The transaction will be governed by Kuwaiti law and is subject to customary closing conditions and regulatory approvals. Centerview Partners, HSBC and J.P. Morgan acted as financial advisors to KPC.

WAM