Kuwait mulls pipeline lease in bid to raise as much as USD 7 bn

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Kuwait to raise funds via pipeline leases: The Kuwait Petroleum Corporation (KPC) is considering reviving a project — called Shaheen — to lease out and lease back its crude oil pipelines, AlArabiya reports. The proposed plan involves leasing 13 pipelines for a 25-year period, with KPC aiming to generate between USD 5-7 bn from the move. Discussions are still ongoing, and a final decision is yet to be made by the Cabinet.

The bigger picture: This follows reports of KPC’s plan to lease out its pipeline infrastructure to help fund a USD 65 bn investment plan supporting various business activities, including exploration and petrochemicals.

ADVISORS- Private banking firm Centreview Partners is reportedly advising the state-backed firm on the move.

In line with the regional trend: Saudi Arabia’s Aramco and the UAE’s Adnoc first made the move to lease their own pipelines in the late 2010s as part of a general push to optimize returns on their assets. Earlier this year, ADQ-backed alternative investment firm Lunate acquired a 6% stake from Italian gas network operator Snam SpA in Adnoc Gas Pipelines — which itself has lease rights to 38 pipelines from the parent company Adnoc. In 2021, Aramco signed a landmark USD 15.5 billion lease and leaseback with a consortium led by BlackRock — which recently took up a minority stake in the Saudi Bahrain Pipeline Company from Bahrain’s Bapco Energies.

ADVISORS- Private banking firm Centreview Partners is reportedly advising the state-backed firm on the move.