Kuwait Oil Company Signs $16B Pipeline Leaseback Deal Under Project Shaheen

Kuwait Oil Company (KOC), a wholly owned subsidiary of Kuwait Petroleum Corporation (KPC), has signed a $16 billion sale-and-leaseback agreement for its domestic oil export pipeline network under Project Shaheen, according to state news agency KUNA. Largest FDI in Kuwait's historyThe deal is the largest foreign direct investment in Kuwait's history, with strategic partners including Blackstone, Brookfield, and KKR. Under the 20.5-year agreement, a newly established Kuwait-incorporated joint venture will lease the usage rights to KOC's 13 domestic oil export pipelines, covering approximately 320 kilometers. KOC will retain a 51% majority stake in the joint venture, while Blackstone, Brookfield, and KKR will collectively own the remaining 49%. KOC will continue to own and operate the pipeline network, with the arrangement placing no restrictions on Kuwait's oil production or refining volumes. The company said the partnership is also intended to attract greater long-term foreign investment and support Kuwait's economic diversification strategy. "This transaction sends a powerful signal that Kuwait continues to rise as an attractive destination for global capital, even amid a challenging regional environment," stated Shaikh Nawaf Saud Al-Sabah, Deputy Chairman and CEO of KPC. Funding future capacityThe transaction is expected to generate $7.85 billion in cash proceeds upon completion, providing additional funding for KPC's capital expenditure programs. This includes its strategic objective to boost crude oil production capacity to 4 million barrels per day by 2035 and support Kuwait's broader economic diversification agenda. Following similar pipeline monetizations by Saudi Aramco, ADNOC, and Bapco Energies, KPC's deal reflects a broader push by Gulf oil giants to unlock capital from infrastructure assets to fund ambitious domestic investment goals.Kuwait’s oil sector is the cornerstone of its national economy, accounting for roughly 90% of government revenue. Holding around 7% of the world’s proven crude reserves, most notably anchored by the massive Greater Burgan field, the country currently produces about 2.7 to 3.15 million barrels per day, making infrastructure partnerships like Project Shaheen central to funding its long-term expansion goals.