At least 15 companies are expected to tender bids for the fourth refinery that Kuwait National Petroleum Company (KNPC) intends to construct in al-Zour, southern Kuwait, the official KUNA news agency reported yesterday.

KNPC's Deputy Managing Director Asaad al-Saad was quoted as noting that the construction budget has been brought up from six billion U.S. dollars to 12 billion dollars after the first bid failed.

Al-Saad explained that raising the project's budget was to counter increased cost of construction material resulting from the hike in global oil sector investments, especially in the Gulf region.

Moreover, he noted that KNPC had held a meeting recently with top companies that had not placed bids the previous time but were willing to take part now.

The official then urged oil companies that did not bid for the first time to do it now, according to the report.

KNPC had allocated a budget of six billion dollars for the construction of the fourth refinery in Kuwait, but tendered bids exceeded this by at least double the costs, compelling the company to cancel the bid and call for a re-bid.

According to KUNA, the new refinery in Al-Zour will produce environmentally-friendly fuel to operate electricity and water plants around the country, and will produce petrochemicals for export.

The refinery was to come into operation in 2010, whose designed production capacity will be 615,000 barrels per day.

Accounting for 10 percent of the world's proven oil reserves, Kuwait boasted proven oil reserves of about 101.5 billion barrels and now produces 2.45 million barrels of crude oil per day.