Kuwait National Petroleum Corp. plans to award the contracts to build a new $14.6 billion refinery to process crude oil for domestic power plants in the first quarter, a company official said Thursday.

KNPC is presently evaluating bids received on Dec. 26 from international companies, including JGC Corp. and Snamprogetti, for four separate packages covering the construction of the Al Zour refinery, a KNPC official who declined to be named, told Zawya Dow Jones.

"By mid-February we will complete the evaluation of bids. There will be a first quarter award," the official said.

The 615,000-barrel a day Al Zour refinery, Kuwait's fourth, will mainly produce low-sulfur fuel oil for the country's power plants.

Project completion is scheduled for March 2012, the official said.

Foster Wheeler Ltd., Technip S.A. and several South Korean contractors are among the other bidders for the project's four packages, comprising processing units, marine work and tank farms, according to the ABQ Zawya projects monitor.

KNPC, which will provide full financing for the scheme, has set aside a budget of 4 billion Kuwaiti dinars ($14.6 billion) for construction.

Kuwait earlier this year decided to raise the budget for the Al Zour project after bids came in at more than double the original $6.3 billion budget in December 2006.

Project cost in the Middle East have soared in the past three years as governments are spending record oil revenues on building and expanding industries and infrastructure, leading to shortages in contractors, raw materials, equipment and qualified labor, and in turn driving up prices.

Kuwait, the fourth largest oil producer in the Middle East, presently has three refineries with combined capacity to process about 930,000 b/d of crude oil.

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