Kuwait’s KPC Signs $16B Pipeline Deal With Blackstone-Led Consortium
Synopsis
Kuwait Petroleum Corporation has signed a US$16 billion pipeline lease and leaseback deal with Blackstone, Brookfield and KKR, marking the largest foreign direct investment in Kuwait’s history.
Key Highlights
- Kuwait Petroleum Corporation (KPC) for a US$16 billion lease and leaseback of its crude oil pipeline network.
- The consortium consists of Blackstone, Brookfield and KKR.
- The transaction is the largest foreign direct investment in Kuwait's history, KPC said.
Kuwait Petroleum Corporation (KPC) has entered a US$16 billion lease and leaseback agreement with a consortium of Blackstone, Brookfield and KKR for its crude oil pipeline network. Kuwait Petroleum Corp (KPC) said the agreement is the biggest foreign direct investment in the history of Kuwait.
Joint Venture
Operating under Project Peregrine, a partnership between the three investors and KPC’s subsidiary Kuwait Oil Company (KOC) will form through a 20.5-year lease and leaseback model that includes a volume-based tariff. In the joint venture, investor consortium will own 49% stake and in turn KOC retaining 51% share, holding complete ownership and operating control over pipeline network.
The network consists of 13 pipelines, with a length of approximately 320 km (199 miles) and transports crude and refined products between Kuwait’s oilfields and export terminals on the Arabian Gulf.
Funding Domestic Investment
KPC said the deal would provide US$7.85 billion in upfront cash to book at the close in support of its capital expenditure program. KPC Deputy chairman and CEO Shaikh Nawaf Saud Al-Sabah said the deal shows that Kuwait remains an attractive destination for foreign direct investment despite a tough regional climate.
The deal is part of a wave of pipeline financing arrangements undertaken by Saudi Aramco, Abu Dhabi National Oil Company (ADNOC), and Bapco Energies. KPC was advised by Centerview Partners, HSBC and JP Morgan as financial advisers.
Source: Reuters
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