Kuwait Oil Company signs $16bn pipeline lease-back deal with Blackstone, Brookfield, KKR

Source: Offshore Technology Author: Shree Mishra Reading Time: 2 min

Kuwait Oil Company (KOC), a wholly owned subsidiary of Kuwait Petroleum Corporation (KPC), has entered into a lease-and-lease-back agreement valued at $16 billion (Kd 4.96 billion) with a consortium of international investors led by Blackstone, Brookfield, and KKR.

The agreement covers KOC's entire domestic and export pipeline network.

Key Details

• Largest FDI in Kuwait: The transaction represents the largest foreign direct investment in the country's history.
• Project Name: Dubbed Project Peregrine, it is described as Kuwait's largest infrastructure partnership.
• Joint Venture Structure: A new Kuwaiti-incorporated joint venture (JV) will lease usage rights for all 13 of KOC's pipelines, spanning approximately 320 km.
• Lease-Back Arrangement: These rights will be leased back to KOC for 20.5 years, with KOC retaining exclusive use, operational control, and maintenance responsibilities on a volume-based tariff basis.

Ownership and Control

• Consortium Stake: Following a competitive selection process, the consortium will acquire a collective 49% stake in the JV, divided equally among Blackstone, Brookfield, and KKR.
• KOC Stake: KOC will hold the remaining 51%, retaining full ownership and operational control over the pipeline network.
• No Production Limits: The structure imposes no restrictions on Kuwait's refining throughput or crude production volumes, which remain under the authority of the State of Kuwait.

Financial Impact

• Upfront Proceeds: The JV is expected to generate $7.85 billion in upfront proceeds for KOC upon closing.
• Capital Expenditure Support: These funds are expected to support KPC's capital expenditure plans, including the goal of reaching 4 million barrels of crude oil production capacity per day by 2035.

Statements from Key Figures

Stephen Schwarzman, Chairman, CEO, and Co-Founder of Blackstone, said:

"Kuwait's leadership, vision and resources have made it a compelling destination for international capital, built on its strength in the energy sector and remarkable efforts to diversify its economy. We are proud to support this critical infrastructure, helping meet rising global energy demand while deepening Blackstone's nearly four-decade partnership with Kuwait."

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. It delivers on the commitment announced by His Highness the Prime Minister Shaikh Ahmad Abdullah Al-Ahmad Al-Sabah at the Kuwait Oil & Gas Show (KOGS) in February 2026 to attract world-class international investors into Kuwait's strategic infrastructure while preserving full national ownership and operational control."

Broader Context

• Economic Diversification: The agreement supports efforts to diversify Kuwait's sources of capital and deepen engagement with global investors.
• Geopolitical Climate: The deal was announced amid ongoing regional geopolitical tensions and is one of the Arabian Gulf's first major inward investments in recent years.

Regulatory and Advisory

• Conditions: The agreement is subject to regulatory approvals and standard closing conditions, governed by Kuwaiti law.
• Financial Advisers: Centerview Partners, HSBC, and JP Morgan served as financial advisers to KPC.

This article was originally created and published by Offshore Technology, a GlobalData owned brand.