Kuwait’s KPC signs $16bn pipeline lease deal with Blackstone, KKR and Brookfield

DUBAI: Kuwait Petroleum Corporation (KPC) has signed a $16 billion deal to lease and lease back its crude oil pipeline network to a consortium of global investment firms Blackstone, Brookfield and KKR, the state-owned Gulf company announced on Saturday, calling it the largest foreign direct investment in Kuwait's history.

Under the arrangement, named Project Peregrine, KPC's subsidiary Kuwait Oil Company (KOC) is forming a joint venture with the three investors through a lease and leaseback structure running for 20.5 years, built around a volume-based tariff, according to a KPC statement.

The consortium of Blackstone, Brookfield and KKR will jointly hold a 49% stake in the venture, while KOC retains 51% along with full ownership and operational control of the network. The pipeline system comprises 13 pipelines stretching roughly 320 kilometres (199 miles) and is used to move crude oil and refined products across Kuwait, connecting the country's oilfields to export terminals on the Arabian Gulf.

KPC said the deal is expected to generate $7.85 billion in upfront proceeds at closing, funds it said would support the company's capital expenditure plans.

"This transaction sends a powerful signal that Kuwait continues to rise as an attractive destination for global capital, even amid a challenging regional environment," said KPC Deputy Chairman and CEO Shaikh Nawaf Saud Al-Sabah.

The agreement was finalised against a tense regional backdrop. Reuters had previously reported, citing sources, that the stake sale process began just before joint U.S.-Israeli strikes on Iran on February 28. Iran has continued targeting infrastructure in Kuwait and elsewhere in the region since an interim U.S.-Iran truce collapsed last month. On Friday, Iran said it had struck U.S. military equipment depots in northern Kuwait, along with U.S. troop positions at Camp Arifjan and Camp Doha near Kuwait City.

The transaction follows a broader trend among Gulf state oil companies and sovereign investors seeking to raise capital from infrastructure assets to fund domestic investment plans, with similar pipeline fundraisings already completed by Saudi Arabia's Aramco, the Abu Dhabi National Oil Company, and Bahrain's Bapco Energies.

Centerview Partners, HSBC and JP Morgan served as financial advisors to KPC on the deal.