Khaberni - The deal to sell a stake in the crude oil pipeline network owned by the Kuwait Petroleum Corporation is advancing to a more sophisticated stage, after three informed sources revealed to Reuters that the American bank "J.P. Morgan" and two Kuwaiti banks will join the British bank "HSBC" within a financing alliance worth $6 billion allocated for potential buyers.
Reuters had reported in February that the Kuwait Petroleum Corporation was in talks with potential investors about selling a stake estimated at about $7 billion in its pipeline assets, a step that is part of a wave of deals being executed by national oil companies in the Gulf to enhance liquidity and recycle assets.
The war disrupted the plan
However, the deal faced uncertainty after the US-Israeli war on Iran, as the Kuwaiti state energy company announced that some of its operational units had suffered "significant material damage" from drone attacks, without specifying the affected locations, according to Reuters.
Two of the sources mentioned that the deadline to submit initial bids was postponed from April 7 to April 28, after investors requested additional time due to the acceleration of military developments. A ceasefire between the United States and Iran had been announced on April 8.
One of the sources added, according to Reuters, that investors are seeking guarantees against the risks of supply disruptions through the Kuwaiti pipeline network or through the Strait of Hormuz.
Competitive financing terms
The sources stated that the proposed loan to finance the project would be for 20 years, with a benchmark rate of 170 basis points above the guaranteed overnight financing rate, which one of them described as a "competitive" level given the current market conditions in the region.
Reuters also added that the financing would also include the National Bank of Kuwait and Kuwait Finance House, while J.P. Morgan is advising the Kuwait Petroleum Corporation on the same deal.
Both "HSBC" and "J.P. Morgan" declined to comment to the agency, while neither the Kuwait Petroleum Corporation nor the National Bank of Kuwait nor Kuwait Finance House responded to requests for comment, according to Reuters.
Broader Gulf context
The deal is the latest in a series of financing and stake sales in Gulf oil infrastructure, after similar deals executed by Saudi Aramco, UAE's ADNOC, and Bahrain's BAPCO.
The pipeline network of the Kuwait Petroleum Corporation transports crude oil and refined products within Kuwait, and connects the main fields to export stations on the Gulf, which provides it with high operational and strategic importance in the regional energy market.
