Kuwait Petroleum Corporation announced its subsidiary, Kuwait Oil Company, has signed a $16 billion lease and leaseback agreement covering its crude oil pipeline network with a consortium comprising Blackstone, Brookfield Asset Management, and KKR, according to CNBC. The state-owned company described the transaction, named Project Peregrine, as the largest foreign direct investment in Kuwait’s history.
Under the agreement, Blackstone, Brookfield, and KKR will each hold an equal share of a combined 49 percent stake in the joint venture, while Kuwait Oil Company retains a controlling 51 percent stake along with full ownership and operational control of the network, which comprises 13 pipelines spanning approximately 320 kilometers. The joint venture will run for 20.5 years, with payments to the venture structured around a volume-based tariff tied to the amount of crude oil transported through the network. The transaction is expected to generate $7.85 billion in upfront proceeds for Kuwait Oil Company, which the company plans to use to help expand its crude oil production capacity toward a target of four million barrels per day by 2035.
The deal marks KKR’s first direct investment in Kuwait, following the firm’s earlier investment in Saudi Arabia through Acwa Power. It comes as Gulf state oil companies and sovereign investors increasingly look to raise capital from infrastructure assets, following similar pipeline fundraising deals by Saudi Arabia’s Aramco, Abu Dhabi National Oil Company, and Bahrain’s Bapco Energies. The agreement was signed as Kuwait faces near-daily attacks from Iran, including strikes the country said hit a power plant and oil facility.
