Kuwait Petroleum Corp. (KPC) has agreed to a $16 billion lease-and-leaseback deal with Blackstone Inc., KKR & Co. Inc., and Brookfield Asset Management Ltd. for its crude oil pipeline network. It's a landmark transaction, and it's happening at a time when the region is anything but calm.
The state-owned company is calling the deal, known as Project Peregrine, the largest foreign direct investment in Kuwait's history. Under the agreement, KPC subsidiary Kuwait Oil Co. (KOC) will set up a joint venture with the three US investment groups for 20.5 years. Blackstone (Blackstone (BX)), KKR (KKR (KKR)), and Brookfield (Brookfield Asset Management (BAM)) will collectively own a 49% interest in the venture, leaving KOC with a controlling 51% stake. The transaction is expected to generate $7.85 billion in upfront proceeds for Kuwait.
The deal "sends a powerful signal that Kuwait continues to rise as an attractive destination for global capital, even amid a challenging regional environment," KPC Chief Executive Officer Sheikh Nawaf Al‑Sabah said in a statement on Saturday.
The agreement grants the joint venture usage rights to KOC's network of 13 oil export pipelines, spanning about 320 kilometers. These pipelines transport crude oil and refined products across Kuwait, linking oilfields to export terminals on the Arabian Gulf.
Investor Confidence
Kuwait holds about 6% of the world's proven oil reserves and relies heavily on crude exports for government revenue. The country has been trying to expand production capacity and attract more international investment into its energy industry.
"This investment reflects our confidence in Kuwait and our commitment to providing long‑term capital in support of strategic infrastructure," KKR Co‑CEOs Joe Bae and Scott Nuttall said in the statement. "We look forward to identifying further opportunities to invest alongside Kuwait in the years ahead."
The process for the stake sale was launched just before joint US-Israeli strikes on Iran on February 28, Reuters reported. That timing is notable because the deal is one of the first major inward investments in the Gulf following recent regional tensions. Kuwait also raised $6 billion through a three‑part dollar bond sale on Wednesday, Bloomberg reported.
The KPC 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. It follows similar pipeline fundraisings by Saudi Arabia's Aramco, Abu Dhabi National Oil Company, and Bahrain's Bapco Energies.
Kuwait Under Fire
The Arabian Gulf oil producer has come under near‑daily attacks from Iran after the escalation in hostilities between the US and Iran. Iran has targeted Kuwaiti and US military bases, as well as power and water plants.
Kuwait's armed forces intercepted Iranian drones on Friday, the General Staff of the Kuwaiti Army said. It added that any explosions heard were the result of air‑defense systems intercepting the drones.
Iran said on Friday it had attacked US military equipment depots in northern Kuwait, and the positions of US troops at Camp Arifjan and at Camp Doha, near Kuwait City.
The attacks have heightened concerns over the vulnerability of critical energy infrastructure across the Gulf. Kuwaiti officials have accelerated efforts to harden export facilities and pipeline corridors, arguing that foreign investment in long‑lived assets such as Project Peregrine strengthens the country's ability to maintain stable crude flows despite rising regional security risks.
