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, Kuwait Oil Company (KOC) Deputy CEO for Planning and Innovation 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.

The line Kuwait wants to join kept Aramco exporting through the crisis: Saudi Arabia was pumping 5.8 mn bbl/d through the 1.2k km pipeline to Yanbu this month, against capacity of 7 mn bbl/d, and plans to lift overland capacity to 10 mn bbl/d within two to three years. Energy Minister Prince Abdulaziz bin Salman said Monday the pipeline has already returned more than it cost to build. Shipments from other Gulf producers, Kuwait among them, stopped over the same period.

Kuwait has lost nearly a quarter of its crude output since the crisis began. Production is running at 2 mn bbl/d, down from 2.6 mn bbl/d, Al Abduljaleel told us. What remains is split between domestic refineries and exports.

The UAE offers a second way out: Kuwait is also studying access to a pipeline route through the UAE to Fujairah, which sits outside the strait as well.

Neither route has reached the feasibility stage, so costs and capacity are still open. Al Abduljaleel says Kuwait would pursue both as long-term investments whether or not regional tensions ease. Under normal conditions, most of its crude would keep moving through existing Gulf ports.

The routes sit inside a bigger spending plan: 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 include bond sales, local bank loans, export credit agency funding, and agreements on existing assets. He pointed to Project Shaheen, under which KOC would lease its existing pipelines to investors, including Blackstone and Brookfield, and lease them back. That money would fund domestic production and infrastructure. The Saudi and UAE routes would be financed separately.

Kuwait also wants its oil stored closer to its customers: It is weighing new storage in Asia after earlier arrangements near Japan and South Korea proved limited in scale. “Given the situation we went through, having oil and petroleum-product storage facilities near markets is one of the necessary solutions,” he says. 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.

Riyadh pitches itself as the region’s safe pair of hands on oil

Supply security was also the main topic at the World Petroleum Council’s energy congress in Riyadh this week, the first time the Kingdom has hosted the event, WPC Energy Executive Committee Member Ivan Marten tells EnterpriseAM. “Now we are all in the news and we are understanding why this is important and why energy security is important, and we should care about this,” he says.

The CEOs of ExxonMobil, TotalEnergies, Shell, and BP sat this one out. Marten put it down to a mix of personal circumstances, security concerns, and company travel policies. Riyadh’s King Khalid International Airport has been targeted three times in a week, and the UK is advising against all but essential travel to Riyadh and other parts of Saudi Arabia. The Energy Ministry helped international delegations with transport and logistics, he says.