Kuwait Petroleum Corporation (KPC) has entered into a $16 billion investment agreement covering its crude oil pipeline network with a consortium made up of Blackstone, Brookfield and KKR, the state-owned company said on Saturday. The transaction, branded Project Peregrine, is being described as the largest foreign direct investment in Kuwait's history.
Under the terms of Project Peregrine, a unit of KPC, Kuwait Oil Company (KOC), will form a joint venture with the three U.S.-based investment firms using a lease and leaseback framework that spans a 20.5-year period. The financial arrangement incorporates a volume-based tariff, according to the statement.
The investment group will collectively own 49% of the joint venture. KOC will maintain a 51% stake and will continue to hold full ownership and operational control of the underlying pipeline network. The network comprises 13 pipelines with a combined length of roughly 320 kilometres (199 miles).
The transaction is expected to produce $7.85 billion in upfront proceeds at closing. KPC framed the deal as part of a wider effort by Gulf state oil companies and sovereign investors to monetize infrastructure assets and attract foreign capital as they seek funding for domestic investment plans.
Project Peregrine’s lease and leaseback structure and the inclusion of a tariff tied to throughput volumes are central components of the commercial terms. The 20.5-year horizon establishes a long-term contractual relationship between KOC and the investor group, while KOC’s retained ownership and operational control indicate the company will continue to manage day-to-day network operations despite the transfer of economic interest to the joint venture partners.
The consortium's 49% holding and KOC’s 51% ownership reflect the distribution of economic stakes in the joint venture. The pipeline asset being transacted includes a network of 13 pipelines spanning approximately 320 kilometres, which remains under KOC’s operational stewardship.
Key points
- Project Peregrine is a $16 billion lease and leaseback involving KPC, Blackstone, Brookfield and KKR.
- The joint venture covers a 13-pipeline network of about 320 kilometres, with KOC retaining 51% and operational control.
- The agreement runs for 20.5 years and incorporates a volume-based tariff; upfront proceeds of $7.85 billion are expected at closing.
Risks and uncertainties
- The deal includes a volume-based tariff - revenue for investors will be linked to pipeline throughput volumes.
- The arrangement is long-term, spanning 20.5 years, creating extended exposure for both investors and the state firm to future operational and market conditions.
- The $7.85 billion in upfront proceeds is described as expected at closing, indicating that receipt of those funds is contingent on completion of the closing process.