OTTAWA (dpa-AFX) - Kuwait Petroleum Corporation or KPC announced that its wholly owned subsidiary, Kuwait Oil Company or KOC, has signed a US$16.0 billion lease-and-lease-back agreement covering its entire domestic and export pipeline network. The deal was reached with a consortium of international infrastructure and institutional investors led collectively by Blackstone, Brookfield and KKR.
As part of the transaction, a newly formed Kuwaiti-incorporated joint venture will lease from KOC the usage rights to all 13 pipelines, spanning about 320 kilometers of Kuwait's network. Under the agreement, the JV will grant back to KOC exclusive use, operational and maintenance rights for a 20.5-year period, in exchange for a volume-based tariff.
KOC and the consortium will establish the new joint venture with KOC holding a 51% majority stake and the consortium collectively holding the remaining 49% on equal terms. KOC will retain full ownership and operational control of the pipeline network. The JV will not impose restrictions on Kuwait's refining throughput or production volumes, which remain subject to decisions by the State of Kuwait.
The transaction is expected to generate upfront proceeds of US$7.85 billion for KOC upon closing. These funds will support KPC's capital expenditure plans, including its target of achieving 4 million barrels per day of crude oil production capacity by 2035, while also advancing Kuwait's broader strategy to diversify capital sources and deepen engagement with global investors.
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