Kuwait has announced its largest foreign direct investment on record after Kuwait Oil Company, a subsidiary of Kuwait Petroleum Corporation, signed an agreement to lease and re-lease its domestic and crude export pipeline network under the Shaheen project, in a deal valued at $16 billion with a global consortium of infrastructure investors.
Details of the Shaheen project
According to the company, the agreement was signed with a consortium led by investment funds managed by Blackstone, Brookfield, and KKR.
The deal takes the form of a 20.5-year lease and leaseback arrangement with a tariff linked to flow volumes.
The project is seen as a strategic step in Kuwait’s efforts to modernize its oil infrastructure while retaining national ownership and operational control.
Pipeline network spanning 320 kilometers
The network covered by the agreement consists of 13 pipelines stretching across approximately 320 kilometers.
Kuwait Oil Company will hold a 51 percent stake in the joint venture, while the investor consortium will own the remaining 49 percent.
Upfront proceeds to support capital spending
Kuwait Petroleum Corporation said the deal is expected to generate $7.85 billion in upfront cash proceeds when completed, which will help support its capital expenditure programs.
The company also said the agreement fits within Kuwait’s broader plan to raise crude production capacity to 4 million barrels per day by 2035.
Message of confidence in Kuwait’s investment climate
Sheikh Nawaf Saud Nasser Al-Sabah, deputy chairman and chief executive of Kuwait Petroleum Corporation, said the agreement sends a clear message that Kuwait remains an attractive destination for global capital, even amid current regional challenges.
He added that the project marks an important milestone in the country’s economic development and reflects Kuwait’s commitment to attracting top-tier global investors while preserving national ownership.
Ownership and operational control remain with Kuwait
Under the agreement, Kuwait Oil Company will retain full ownership and operational control of the pipeline network.
It will also keep exclusive rights to use, operate, and maintain the system for the duration of the contract.
The structure is designed as a lease and re-lease model, ensuring that strategic assets remain under national control.
Advisers and approvals
The company said the deal remains subject to the completion of required regulatory and official approvals in Kuwait.
Financial advisers to Kuwait Petroleum Corporation on the transaction included:
– Centerview Partners
– HSBC
– J.P. Morgan
Why the deal matters
The transaction is one of the most significant energy-sector investment moves in the Gulf in recent years, given its scale and its implications for Kuwait’s oil infrastructure.
It also reflects a wider trend among Gulf states to attract foreign capital into long-term strategic projects while maintaining sovereign control over critical assets.
Key figures
– Deal value: $16 billion
– Upfront proceeds: $7.85 billion
– Contract length: 20.5 years
– Number of pipelines: 13
– Network length: 320 km
– Kuwait Oil Company stake: 51%
– Investor consortium stake: 49%
Conclusion
Kuwait’s announcement confirms its push to strengthen its appeal to international investors, particularly in the energy and infrastructure sectors, while keeping control of strategic assets at home. The Shaheen project is likely to become one of the country’s most important investment initiatives in the years ahead.
