State-held Kuwait Petroleum Corporation (KPC) is considering following in the footsteps of its Saudi and Abu Dhabi peers by tapping major international infrastructure investors to buy a stake in its crude oil pipeline network in a deal that could be valued at about $7 billion, sources with knowledge of the plan told Reuters.
The Kuwaiti national oil company has held initial talks with several major investors about the potential transaction. The world’s biggest asset manager BlackRock, as well as Brookfield Asset Management, EIG Partners, and KKR have shown interest in the assets which Kuwait plans to lease and re-lease to raise funds. Macquarie Infrastructure Partners, I Squared Capital, and Chinese state investment firms China Silk Road Fund and China Merchants Capital have also expressed interest in a deal, according to Reuters’ sources.
The potential agreement could be structured with about $1.5 billion in equity and the remainder financed through debt with a pool of banks, the sources added.
Kuwait could launch a formal process to seek a stake sale in the crude pipeline network as soon as the end of this week, Reuters notes.
If Kuwait manages to structure a deal, it would join other major crude oil producers in the region, such as Saudi Arabia and the United Arab Emirates, in selling under concession a minority stake in its pipelines.
In recent years, Saudi Arabia and the UAE have signed similar deals with international investors, including BlackRock and KKR.
Saudi Arabia’s oil giant Aramco last year signed an $11 billion lease and leaseback deal involving its Jafurah gas processing facilities with a consortium of international investors, led by funds managed by Global Infrastructure Partners (GIP), a part of BlackRock.
KKR has bought a minority stake in ADNOC Gas Pipeline Assets LLC, the gas pipeline network of Abu Dhabi’s national oil company, in a move signaling growing investor confidence in infrastructure opportunities in the oil and gas-rich Middle East.
By Charles Kennedy for Oilprice.com
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