Kuwait Petroleum Corporation (KPC) has announced that its wholly owned subsidiary, Kuwait Oil Company (KOC), has entered into a US$16 billion lease-and-leaseback agreement covering the company’s domestic and export crude oil pipeline network with an international consortium led by Blackstone, Brookfield, and KKR.
The transaction involves KOC’s entire pipeline network, comprising 13 pipelines spanning approximately 320 kilometres across Kuwait. Under the agreement, a newly established joint venture (JV), incorporated in Kuwait, will lease the usage rights to the pipeline assets from KOC. The JV will subsequently grant KOC exclusive rights to operate, maintain, and use the infrastructure for a period of 20.5 years in exchange for a volume-based tariff.
The joint venture will be jointly owned by KOC and the investor consortium, with KOC retaining a 51 percent majority stake while Blackstone, Brookfield, and KKR will collectively hold the remaining 49 percent, each with equal ownership interests. KOC will continue to own the pipeline assets outright and retain full operational control of the network. The agreement does not affect Kuwait’s authority over crude oil production levels or refining throughput, which remain under the control of the State of Kuwait.
According to KPC, the transaction is expected to generate approximately US$7.85 billion in upfront proceeds for KOC upon financial close. The capital will support the corporation’s investment programme, including plans to expand Kuwait’s crude oil production capacity to 4 million barrels per day by 2035, while also contributing to broader efforts to diversify funding sources and attract international investment into the country’s energy sector.
The investment is being described as the largest foreign direct investment (FDI) transaction in Kuwait’s history, reflecting growing international investor participation in the country’s strategic infrastructure sector. The agreement is also among the first major infrastructure investments announced in the Gulf region following recent geopolitical tensions, underscoring continued investor interest in Kuwait’s energy assets.
The lease-and-leaseback structure enables Kuwait to secure external capital while maintaining ownership and operational management of critical energy infrastructure. Such financing models have become increasingly common among national energy companies seeking to unlock value from existing assets without relinquishing control over strategic operations.
The transaction was structured under Kuwaiti law and remains subject to customary regulatory approvals and closing conditions.
Centerview Partners, HSBC, and J.P. Morgan acted as financial advisers to Kuwait Petroleum Corporation, while Jefferies served as sole financial adviser to Blackstone on the transaction.
The agreement highlights the continued use of infrastructure investment partnerships as a mechanism for financing large-scale energy development while preserving national ownership of key oil and gas assets. For Kuwait, the transaction provides additional capital to support future upstream investment while strengthening engagement with leading global infrastructure investors.
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