Three U.S. funds invest $16 billion in Kuwait oil pipeline deal

Kuwait Petroleum Corporation (KPC) announced on Saturday that it had signed a $16 billion deal involving its oil pipeline network with a consortium that includes global investment funds Blackstone, KKR, and Brookfield Corporation. The state-owned company described the agreement as the largest foreign direct investment in Kuwait’s history.

Under the investment, known as the “Shaheen Project,” Kuwait Oil Company (KOC), a subsidiary of KPC, will establish a joint venture with the three investors through a sale-and-leaseback agreement covering 13 oil pipelines for 20 and a half years, with fees linked to pipeline flow volumes.

KPC CEO and Deputy Chairman Sheikh Nawaf Al-Sabah said the deal “sends a clear message confirming Kuwait’s continued position as an attractive destination for global capital,” despite ongoing regional challenges.

Blackstone, Brookfield, and KKR will collectively hold a 49% stake in the joint venture, while KOC will retain a 51% share, along with full national ownership and operational control of the network. The pipeline system consists of 13 lines extending for nearly 320 kilometers.

The agreement is expected to generate $7.85 billion in cash proceeds upon completion. Financial advisory firms Centerview Partners, HSBC, and JPMorgan Chase assisted with the transaction.

The proceeds will be used to support Kuwait Petroleum Corporation’s investment program, which aims to increase crude oil production capacity to 4 million barrels per day by 2035.

Kuwait currently produces around 2.5 million barrels of oil per day, but the war and the effective closure of the Strait of Hormuz forced the country to sharply reduce output. Kuwait’s oil production fell to around 1.65 million barrels per day in June, compared with 580,000 barrels per day in May.