Kuwait Oil Company signs US$16bn pipeline deal with investors

Kuwait Oil Company (KOC), the upstream subsidiary of Kuwait Petroleum Company (KPC), has signed a US$16bn lease-and-lease-back agreement with a consortium of international investors involving its entire domestic and export pipeline network, representing the largest foreign direct investment in Kuwait’s history

The transaction will involve the formation of a Kuwaiti-incorporated joint venture, which will lease from KOC the usage rights to all of its 13 pipelines, spanning around 320 km of Kuwait’s pipeline network. The JV will lease back to KOC the exclusive use, operational and maintenance rights in the pipeline assets for a period of 20 years and sixth months, 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 holding the remaining 49%. KOC will continue to maintain full ownership and operational control of the pipeline network.

The JV is expected to generate upfront proceeds of US$7.85bn for KOC upon closing.

Why is the deal significant?

• It will support Kuwait Petroleum Company’s capital expenditure plans, including its target of 4mn bpd of crude oil production capacity by 2035; contracts recently reported include a contract worth KD35mn ($113mn) to Chinese group Anton Oilfield Services DMCC to deliver maintenance services for Jurassic Production Facilities (JPF) 1, 2 and 3 in North Kuwait, as KOC seeks to maintain and optimise its production facilities and strengthen operational performance.
• It supports Kuwait's broader efforts to diversify sources of capital and deepen engagement with global investors.
• As the largest foreign direct investment in Kuwait's history, it reflects the quality of KOC's asset base, the strength of KPC’s operational stewardship, and the enduring appeal of Kuwait as an investment destination.
• As one of the first major inward investments in the Gulf region since the onset of recent tensions, it reflects the confidence of global institutional investors in Kuwait and KPC despite the regional tensions. Blackstone is reported to be setting up an office in Kuwait through the Kuwait Direct Investment Promotion Authority (KDIPA) as part of a wider GCC expansion drive. Kuwait’s latest sovereign debt issuance raised US$6bn, with investor demand driving the combined orderbook to more than $14.75 billion across the three-tranche issuance.
• Beyond its immediate proceeds, the JV is intended to encourage further participation by global investors in the national economy, in line with KPC's development plan and Kuwait's long-term diversification agenda.

The transaction follows similar deals concluded by other Gulf NOCs including Aramco, which signed a lease and leaseback deal involving its Jafurah gas processing facilities with a consortium of international investors last year. Aramco closed the transaction to lease and lease back the development and usage rights to the Jafurah Field Gas Plant and the Riyas NGL Fractionation Plant to the Jafurah Midstream Gas Company (JMGC) for a period of 20 years, selling a 49% equity interest in JMGC to a consortium of international investors led by BlackRock’s Global Infrastructure Partners for US$11.1bn.

Prior to that, Aramco concluded a similar arrangement for its pipeline network in 2022, whereby a group of investors acquired a 49% stake in Aramco Gas Pipeline Company for US$15.5bn. Under this arrangement, Aramco Gas Pipelines Company receives a tariff payable by Aramco for the specified gas products that flow through the network, backed by minimum commitments on throughput. Aramco retains a 51% majority stake. As with the Kuwait deal these arrangements allow Aramco to maintain full operational control of its facilities while monetising its assets.

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.

"We are pleased to welcome Blackstone, Brookfield and KKR as long-term partners in this landmark transaction. Their investment reflects confidence in Kuwait's resilience, the quality of KPC's assets and our long-term vision for the country's energy sector.

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