Kuwait's KPC signs $16bn lease and leaseback deal with Blackstone, KKR, Brookfield for oil pipeline network

DUBAI: Kuwait Petroleum Corporation (KPC) has signed a $16 billion deal involving its crude oil pipeline network with a consortium comprising global funds Blackstone, Brookfield and KKR, the state-owned Gulf firm said on Saturday.

It said it was the largest foreign direct investment in the country’s history.

Under the investment called Project Peregrine, KPC’s unit Kuwait Oil Company is establishing a joint venture with the three U.S. investors in a lease and leaseback structure for a 20.5-year period that includes a volume-based tariff, KPC said in a statement.

The deal is part of a broader push by Gulf state oil companies and sovereign investors to raise funds from infrastructure assets and attract foreign capital, as they look to fund domestic investment plans.

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Blackstone, Brookfield and KKR will collectively hold a 49% stake in the joint venture, while KOC will retain a 51% stake as well as full ownership and operational control of the network, which comprises 13 pipelines spanning a total of around 320 kilometres (199 miles).

The transaction is expected to generate $7.85 billion in upfront proceeds at closing.