JPMorgan and two Kuwaiti lenders joined HSBC in a $6 billion financing syndicate to support prospective buyers of a stake in Kuwait Petroleum Corporation’s crude oil pipeline network, according to people familiar with the matter. Moreover, the move strengthened funding capacity for a transaction valued at around $7 billion by investors.
However, the sale process faced disruption after the US-Israeli war with Iran created regional uncertainty. As a result, the state energy group reported “severe material damage” at some operating units following drone attacks, without identifying the affected assets.
Bid deadline pushed back amid conflict concerns
Kuwait Petroleum Corporation pushed back the deadline for preliminary bids to April 28 from April 7, after investors requested additional time due to the fast-moving situation, the sources said. Meanwhile, a ceasefire between the United States and Iran was announced on April 8.
Additionally, investors have sought guarantees to cover potential disruptions in volume linked to Kuwait’s pipeline network and the Strait of Hormuz, one source said.
Loan terms set as Gulf pipeline deals expand
The financing package has a 20-year tenure and carries indicative pricing of 170 basis points over the Secured Overnight Financing Rate, the sources said. Moreover, the National Bank of Kuwait and Kuwait Finance House are participating in the loan syndicate.
One source described the pricing as competitive under current regional conditions. However, HSBC and JPMorgan declined to comment, while Kuwait Petroleum Corporation and the two Kuwaiti lenders did not respond to requests for comment.
The transaction follows a wider trend of pipeline-related fundraising by Gulf national oil companies. Furthermore, Saudi Aramco, ADNOC, and Bahrain’s Bapco Energies have completed recent deals.
Kuwait’s pipeline network transports crude oil and refined products across the country. Therefore, it plays a strategic role by linking oilfields to export terminals on the Arabian Gulf.
