East-West pipeline could become shared Gulf export infrastructure as Kuwait eyes joining

Saudi Arabia’s East-West pipeline is on its way to becoming shared Gulf export infrastructure. Kuwait is in talks to join a proposed Saudi line running to the Red Sea so that it could serve both countries, Deputy CEO for Planning and Innovation at Kuwait Oil Company Mohammed Al Abduljaleel tells EnterpriseAM. “Currently, there is coordination with the Kingdom to find or build a new oil pipeline from east to west, to the Red Sea,” he says.

Why the Kingdom holds the route: Saudi Arabia was pumping 5.8 mn bbl / d through the 1,200 km pipeline this month, against a capacity of 7 mn bbl / d, carrying exports to Yanbu around the Strait of Hormuz. It plans to lift overland transport capacity to 10 mn bbl / d within two to three years. Energy Minister Prince Abdulaziz bin Salman said Monday the pipeline had already delivered benefits exceeding its construction cost. It kept Aramco exporting through the period when shipments from other Gulf producers, Kuwait among them, stopped.

What it’s worth to Kuwait: Production is running at 2 mn bbl / d of crude, down from 2.6 mn bbl / d before the crisis, Al Abduljaleel told us. That’s a fall of roughly 23%, with what remains split between domestic refineries and exports.

The other option is Fujairah: Kuwait is separately studying access to a pipeline route through the UAE to Fujairah, which also sits outside the strait.

Both are early: Neither route has reached feasibility-study stage, leaving costs and capacity estimates undetermined. Al Abduljaleel says Kuwait would pursue the projects as long-term investments regardless of whether regional tensions ease, with most crude continuing to move through existing Gulf ports under normal conditions.

The investment bill: Kuwait plans to invest KWD 20-22 bn (USD 65-72 bn) over five years to expand oil production capacity and develop infrastructure, Al Abduljaleel says. Financing options under consideration include bond sales, local bank loans, export credit agency funding and deals involving existing infrastructure assets. Al Abduljaleel pointed to Project Shaheen, which would raise funds by leasing KOC’s existing pipelines to investors, including Blackstone and Brookfield, and leasing them back. Those proceeds would fund domestic production and infrastructure rather than the export routes through Saudi Arabia or the UAE.

Storage closer to buyers: Kuwait is also weighing new oil storage facilities in Asia to keep supplies closer to major buyers during disruptions, after earlier arrangements near Japan and South Korea proved to be limited in scale, Al Abduljaleel said. “Given the situation we went through, having oil and petroleum-product storage facilities near markets is one of the necessary solutions.” No budget or timeline has been set.

The 2030 target holds: Kuwait’s plan to reach 4 mn bbl / d of capacity by 2030 could slip, though the goal itself is unchanged. “The strategic goal has not been affected. The plans remain as they are,” he says.

Where the market sits: Russell Hardy, CEO of Vitol, one of the world’s largest independent oil traders, warned that crude could hit USD 200 / bbl if Middle East supply disruptions worsen, according to Reuters, even as some 14 mn bbl / d of crude and refined products continue to leave the region, helping contain prices. “We are still far from that figure. But the continuation of this crisis and delays in finding solutions are putting pressure on markets,” Al Abduljaleel says.