Six months ago, Kuwait Petroleum Corporation (KPC) launched plans to monetize its pipeline infrastructure to fund future growth projects (MEES, 6 February). Since then, the Middle East conflict has radically reshaped the regional investment map. Regional governments are having to re-appraise long-term investment priorities, and Kuwait’s oil sector, which provides around 90% of government revenues, has ground to a virtual halt. Against this backdrop, the conclusion of the $16bn lease-and-leaseback agreement this week could be seen as an important vote of confidence in KPC’s long-term prospects.
In a 25 July statement, KPC said its upstream subsidiary KOC would establish a $16bn joint venture alongside Blackstone, Brookfield and KKR to lease the rights to Kuwait’s 13 crude oil pipelines from KOC for a 20.5-year period. KOC will retain 51% in the Kuwaiti-incorporated JV, receiving $7.85bn upfront from its partners for the remaining 49%. The transaction follows similar pipeline monetization agreements in recent years by Saudi Aramco and Abu Dhabi’s Adnoc. (CONTINUED - 983 WORDS)
