Kuwait Petroleum Corporation (KPC) has entered into a landmark pipeline lease deal through its wholly owned subsidiary, Kuwait Oil Company (KOC), by signing a $16 billion lease-and-lease-back agreement covering its complete domestic and export pipeline network. The agreement has been concluded with a consortium of international infrastructure and institutional investors led collectively by Blackstone, Brookfield and KKR. This pipeline lease deal marks a major transaction involving Kuwait’s energy infrastructure while preserving KOC’s operational authority over the assets.
According to a statement issued by KPC, the arrangement includes the establishment of a newly incorporated Kuwaiti joint venture (JV), which will lease the usage rights to all 13 of KOC’s pipelines. These assets extend across approximately 320 kilometres of Kuwait’s pipeline network. As part of the pipeline lease deal, the JV will lease the usage rights from KOC and subsequently grant back to KOC the exclusive rights to use, operate and maintain the pipeline assets for a period of 20.5 years. In return, KOC will pay a volume-based tariff under the agreed structure.
KOC Retains Ownership While JV Supports Capital Plans
The new JV will be jointly established by KOC together with the consortium comprising Blackstone, Brookfield and KKR. Under the ownership arrangement, KOC will retain a 51% majority stake, while the consortium will collectively own the remaining 49%, with equal stakes and on equal terms among the participating investors.
Despite the formation of the JV, KOC will continue to hold full ownership of the pipeline network and remain responsible for its operational control. The pipeline lease deal also specifies that the JV will not place any restrictions on Kuwait’s refining throughput or production volumes, with all such decisions continuing to remain under the authority of the State of Kuwait.
Once the transaction reaches closing, the JV is expected to provide KOC with upfront proceeds of $7.85 billion. These funds are intended to support KPC’s capital expenditure programme, including its objective of reaching 4 million barrels per day of crude oil production capacity by 2035.
Commenting on the agreement, 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 further emphasized that the transaction demonstrates Kuwait’s continued appeal to international investors despite the broader regional climate.
The pipeline lease deal will be governed by Kuwaiti law and remains subject to customary closing conditions as well as the necessary regulatory approvals. Centerview Partners, HSBC and J.P. Morgan served as financial advisors to KPC throughout the transaction.
