Kuwait Signs $16 Billion Lease-and-Leaseback Deal for Crude Pipeline Network

Kuwait Petroleum Corporation (KPC) announced that its subsidiary, Kuwait Oil Company (KOC), has entered a $16 billion lease-and-leaseback agreement for the domestic and export crude-oil pipeline system, dubbed Project Peregrine. A Blackstone-Brookfield-KKR consortium will hold a 49 % equity stake, while KOC retains 51 % and operational control. The consortium gains usage rights to all 13 pipelines (?320 km). An upfront payment of $7.85 billion will be made at closing, with the balance delivered through a volume-based tariff over 20.5 years.

Kuwait Oil Company signs $16 billion pipeline lease deal with global investor consortium ReutersBlackstone, KKR and Brookfield just paid $7.85 billion upfront for nearly half of Kuwait's oil pipeline backbone

The deal follows a Gulf-wide trend of monetising state-owned energy infrastructure. Similar financings have been completed by Saudi Aramco, ADNOC and Bahrain’s Bapco Energies. It was launched shortly before joint U.S.–Israeli strikes on Iran on February 28, a period that has seen heightened Iranian attacks on Kuwaiti and U.S. facilities.

Benzinga

• Enterprise value: $16 billion

Blackstone, KKR and Brookfield just paid $7.85 billion upfront for nearly half of Kuwait's oil pipeline backbone

• Upfront cash: $7.85 billion for KOC, earmarked for capital projects, including a target of four million barrels per day of crude production by 2035

Kuwait Oil Company signs $16 billion pipeline lease deal with global investor consortium

• Equity split: 49 % consortium, 51 % KOC

Kuwait Oil Company signs $16 billion pipeline lease deal with global investor consortium

• Duration: 20.5 years, volume-based tariff linking returns to oil transported

Blackstone, KKR and Brookfield just paid $7.85 billion upfront for nearly half of Kuwait's oil pipeline backbone

• Asset scope: 13 pipelines, 320 km, remaining under KOC ownership and maintenance

Kuwait Oil Company signs $16 billion pipeline lease deal with global investor consortium

Shaikh Nawaf Saud Al-Sabah, Deputy Chairman and CEO of KPC, called the transaction the largest foreign direct investment in Kuwait’s history. KKR co-CEOs said the investment reflects confidence in Kuwait’s energy sector. Blackstone’s Stephen Schwarzman highlighted the strategic importance of the partnership.

KPC signs historic $16 billion Shaheen Project deal to boost energy investment The National News

Kuwaiti forces reported intercepting Iranian drones on the announcement day, neutralising the threats. Iranian statements claimed attacks on U.S. depots and troop positions in northern Kuwait, raising concerns about the vulnerability of energy infrastructure and prompting accelerated hardening of export facilities and pipeline corridors.

BenzingaKPC signs historic $16 billion Shaheen Project deal to boost energy investment

The deal gives Kuwait a low-cost source of capital while retaining sovereign control of the pipelines. The long-term, commodity-linked cash stream can fund production expansion and diversification without ceding ownership. For investors, the structure offers predictable, volume-based returns on a high-quality asset in a politically stable jurisdiction. It also reinforces a Gulf playbook where lease-and-leaseback models monetize infrastructure without compromising operational sovereignty.

Blackstone, KKR and Brookfield just paid $7.85 billion upfront for nearly half of Kuwait's oil pipeline backbone

• February 28: Stake-sale process launched just before U.S.–Israeli strikes on Iran.

Reuters

• July 25: KPC announced the signing of the $16 billion agreement.

Kuwait Oil Company signs $16 billion pipeline lease deal with global investor consortium

The agreement is subject to customary regulatory approvals and legal conditions under Kuwaiti law before financial close.

Kuwait Oil Company signs $16 billion pipeline lease deal with global investor consortium