Kuwait Oil Company (KOC), a subsidiary of Kuwait Petroleum Corporation (KPC), has signed a $16 billion lease-and-leaseback agreement covering its domestic and export crude oil pipeline network with a consortium led by the Global investment firm, Blackstone, Infrastructure asset manager, Brookfield, and Private equity firm, KKR.

Under the agreement, a newly established joint venture (JV) incorporated in Kuwait will lease the usage rights to KOC’s 13 pipelines, which extend approximately 320 km across the country. The JV will then grant KOC exclusive operational, maintenance, and usage rights to the pipeline network for 20.5 years in return for a volume-based tariff.

The JV will be owned 51% by KOC, while the remaining 49% will be equally shared by Blackstone, Brookfield, and KKR. KOC will retain full ownership and operational control of the pipeline assets, while Kuwait will continue to determine production levels and refining throughput.

The transaction is expected to provide KOC with $7.85 billion in upfront proceeds upon financial close. KPC said the funds will support its capital investment program, including its goal of increasing Kuwait’s crude oil production capacity to 4 million barrels per day (mmbbl/d) by 2035, while advancing the country’s efforts to diversify funding sources and attract international investment.

According to KPC, the agreement represents the largest foreign direct investment (FDI) in Kuwait’s history, reflecting investor confidence in the country’s energy sector and infrastructure assets.

The corporation added that the deal is among the first major inward investments in the Gulf region since the recent escalation of geopolitical tensions, underscoring Kuwait’s resilience and the continued interest of global institutional investors in the country.

KPC noted that, beyond generating immediate capital, the new JV is expected to encourage greater private and international investment in Kuwait’s economy, supporting the country’s long-term economic diversification strategy.

KPC is implementing a long-term strategy to expand upstream capacity while increasing private sector participation in the energy sector. The company aims to raise the country’s sustainable crude oil production capacity to 4 mmbbl/d by 2035, supported by investments in upstream infrastructure and strategic partnerships with international investors.