Kuwait Petroleum Corporation (KPC), a state-owned Gulf company, announced on Saturday that it has reached a $16 billion agreement with a group of international funds, including Blackstone, Brookfield, and KKR, to lease and repurchase its network of crude oil pipelines.
It claimed to be the biggest foreign direct investment in the history of the nation.
Kuwait Oil Company (KOC), a division of KPC, is forming a joint venture with the three international investors in a lease and leaseback arrangement for a 20.5-year period that includes a volume-based tariff under the investment known as Project Peregrine, according to a statement from KPC.
In the release, KPC Deputy Chairman and CEO Shaikh Nawaf Saud Al-Sabah remarked, “This transaction sends a powerful signal that Kuwait continues to rise as an attractive destination for global capital, even amid a challenging regional environment.”
The share selling process began just before joint U.S.-Israeli strikes on Iran on February 28.
After an interim ceasefire between the United States and Iran that was supposed to put an end to the Iran war broke down last month, Iran is still attacking infrastructure in Kuwait and other parts of the Gulf.
Iran claimed to have struck American military equipment stockpiles in northern Kuwait on Friday, as well as American soldier locations at Camp Arifjan and Camp Doha, which are close to Kuwait City.
A COMMON STRUCTURE
The KPC agreement is a part of a larger effort by Gulf state oil firms and sovereign investors to raise money from infrastructure assets and draw in international investment to finance domestic investment ambitions.
It comes after pipeline fundraisers from Bahrain’s Bapco Energies, Abu Dhabi National Oil Company, and Saudi Arabia’s Aramco.
Together, Blackstone, Brookfield, and KKR will own 49% of the joint venture, while KOC will keep 51% and complete ownership and operational management of the network, which consists of 13 pipes totaling about 320 kilometers (199 miles).
KPC said that the deal is anticipated to yield $7.85 billion in upfront revenues at closing, supporting the oil company’s ambitions for capital expenditures.
Kuwait’s oilfields are connected to export terminals on the Arabian Gulf by KPC’s pipeline network, which moves crude oil and refined products throughout the nation.
KPC received financial advice from JP Morgan, HSBC, and Centerview Partners.
