Kuwait is seeking to revive a project to lease out and then lease back its crude oil pipelines, its national oil company said on Tuesday, aligning with Gulf peers like Saudi Arabia and the United Arab Emirates in tapping private capital for strategic energy assets.
Last week, media reports citing people familiar with the matter said the company is considering leasing part of its pipeline network to help fund an investment plan that covers everything from upstream to petrochemicals.
Kuwait Petroleum Corp, at a forum in Kuwait on Tuesday, did not disclose figures.
"We are studying the possibility of leasing and re-leasing (oil) pipelines in the country," the CEO of KPC, Sheikh Nawaf Saud Nasir Al-Sabah, told reporters.
Kuwait's oil sector spends around KWD2 billion ($6.56 billion) annually on strategic projects, financed through KPC's profits, bank borrowing and innovative funding sources in global markets, he said.
"The pipelines are assets owned by KPC and do not generate direct financial returns… If there is an opportunity to secure additional financing through these assets...then welcome," he said.
The move echoes deals in recent years by Saudi Aramco, Abu Dhabi National Oil Company and Bahrain's Bapco Energies to lease and leaseback their pipeline infrastructure networks. Such deals provide upfront cash in return for tariff payments over time.
Sheikh Nawaf said that the proposed process would be "not much different" from that in other Gulf states.
BlackRock, which last month signed a similar deal for Aramco's Jafurah gas project processing facilities in Saudi Arabia, will open an office in Kuwait and has appointed Ali AlQadhi to lead operations in the country, Kuwait's state news agency said earlier this month.
It was not immediately clear if BlackRock would be involved in KPC's potential deal. BlackRock declined to comment.
Kuwait Petroleum Corp in late 2023 said it will spend $410 billion through 2040 on a strategy that aims to boost production capacity to four million barrels per day.
Kuwait Gulf Oil Company, a KPC subsidiary operating in the Neutral Zone shared with Saudi Arabia, has also made progress on the Dorra gas field project in partnership with Saudi Aramco, completing initial engineering designs, KPC added at the forum.
Kuwait is also seeking to implement a programme to drill 15 offshore oil exploration wells, part of a broader push to boost reserves and production capacity.
The acting chief executive of Kuwait Oil Tanker Company, owned by KPC, said the Red Sea route is safe for its tankers, which resumed shipments through the passage after a nearly two-month suspension last year.
"This route carries low risk for us, but we always take precautions," Sheikh Khaled Ahmad Al-Sabah told reporters.
(Reporting by Ahmed Hegagy; Additional reporting by Yousef Saba; Writing by Tala Ramadan and Sarah El Safty; Editing by Kirsten Donovan and Ros Russell)
