Blackstone, KKR and Brookfield have agreed to acquire a 49% stake in a joint venture linked to Kuwait’s national oil pipeline network in a transaction valued at approximately $16bn, according to a report by the Financial Times.
The deal is the largest foreign investment in Kuwait’s history and will provide the Gulf state with almost $8bn in upfront proceeds.
The three private equity and infrastructure investors will take their stake alongside Kuwait Petroleum Corporation (KPC). The joint venture will lease the country’s 320km pipeline network under a long-term arrangement, with KPC retaining the right to use the infrastructure.
Kuwait plans to use the proceeds to support investment in its energy infrastructure and help increase crude oil production capacity to 4 million barrels per day by 2035.
The transaction comes as Gulf states seek to strengthen their finances and raise capital amid heightened regional tensions and attacks on critical infrastructure.
Kuwait has reported a series of missile and drone attacks since the conflict began, including strikes affecting its airport, oil infrastructure and water desalination facilities. The country raised $6bn through bond sales earlier this month as it seeks to bolster its finances and fund infrastructure repairs.
Kuwait said the pipeline transaction demonstrated continued international investor confidence in the country despite the challenging regional environment.
The deal follows similar transactions in Saudi Arabia and Abu Dhabi, where Gulf energy producers have raised billions of dollars by selling minority stakes in strategic infrastructure assets to international investors.
Blackstone, Brookfield and KKR are among the world’s largest infrastructure investors and have expanded their activities across the Middle East in recent years.
Kuwait has a sovereign wealth fund with approximately $1tn in assets but has historically attracted less private capital than some of its Gulf neighbours. The country has recently sought to improve its appeal to international investors, with firms including BlackRock and Goldman Sachs opening offices there last year.
Blackstone chief executive Stephen Schwarzman said Kuwait was a “compelling destination for international capital” because of its significant wealth and efforts to diversify its economy.