Major Investment Firms Eye Kuwait’s $7 Billion Oil Pipeline Deal

Kuwait's national oil company is in early discussions with major investment firms including BlackRock and Brookfield about selling a stake in its oil pipeline network for $7 billion. The deal would follow similar moves by other Gulf nations to monetize their energy infrastructure. The formal launch of the sale process could begin as early as the end of February.

Kuwait’s state-owned oil company is in preliminary discussions with several major investment firms regarding a massive $7 billion deal to sell stakes in its crude oil pipeline infrastructure, according to three individuals with knowledge of the negotiations.

Kuwait Petroleum Corporation has attracted interest from prominent financial giants including BlackRock, Brookfield Asset Management, EIG Partners, and private equity firm KKR, sources revealed. Additional interest has come from Chinese government-backed entities China Silk Road Fund and China Merchants Capital, as well as I Squared Capital and Macquarie Infrastructure Partners.

The proposed deal would be structured with approximately $1.5 billion in equity investment, while the remaining funds would come through debt financing, the three sources indicated.

Leading the effort is Sheikh Nawaf Saud Al-Sabah, who serves as KPC’s deputy chairman and chief executive. He heads a steering committee that maintains tight control over the process, meeting every few weeks to review developments.

Speaking to reporters in September, Al-Sabah explained the company’s rationale: “We are studying the possibility of leasing and re-leasing (oil) pipelines in the country. The pipelines are assets owned by KPC and do not generate direct financial returns. If there is an opportunity to secure additional financing through these assets… then welcome.”

When contacted for comment, BlackRock, Brookfield, Macquarie, KKR, EIG, and I Squared all declined to respond. KPC, China Silk Road Fund, and China Merchants Capital did not return requests for comment.

Sources indicate that KPC is currently reaching out to additional banks to join HSBC in underwriting the debt component of the transaction.

The formal launch of the pipeline stake sale could commence as soon as late February, two sources confirmed, consistent with previous reporting.

The proposed 25-year concession faces challenging market conditions, with crude oil prices around $71 per barrel putting pressure on anticipated volumes and returns. Regional geopolitical tensions add another layer of uncertainty to the deal, one source noted.

This initiative mirrors recent transactions by other Gulf energy companies, including Saudi Aramco, Abu Dhabi National Oil Company, and Bahrain’s Bapco Energies, all of whom have monetized their pipeline infrastructure. These arrangements typically provide immediate capital in exchange for future tariff payments.

Kuwait Petroleum Corporation announced in late 2023 a comprehensive $410 billion investment strategy running through 2040, designed to increase production capacity to 4 million barrels daily.

BlackRock, which completed a similar agreement for Aramco’s Jafurah gas project facilities in Saudi Arabia last year, plans to establish a Kuwait office under the leadership of Ali AlQadhi, according to Kuwait’s official news agency in September.