Kuwait National Petroleum Company (KNPC) is planning a major $500m revamp of its sulphur handling facilities at the ageing Mina al-Ahmadi refinery.

The state-owned company, which oversees all of the country’s refining operations, plans to ask international firms to bid on the deal in December 2010.

The deal to build the facilities will be tendered on an engineering, procurement and construction (EPC) basis, and contractors say that an award is not likely until mid 2011.

Under the deal, KNPC plans to ask the winning contractor to build liquid and dry sulphur storage tanks, pump units, granulation facilities and control mechanisms, as well as a network of pipelines at the refinery. The contract also covers an offshore element, including a landing jetty, a new berth for sulphur ships, ship-loading mechanisms, and associated electrical and instrumentation works.

The deal is one of only two $500m-plus deals KNPC has said that it plans to tender in 2010. The other is for work on a $700m-plus acid gas removal plant, also at the Mina al-Ahmadi refinery.

Sources close to the state refiner say that it also wants to retender construction contracts for the $15bn project to build a refinery at Al-Zour, although it remains unclear what the status of the scheme is. EPC contracts awarded on the deal in 2008 were cancelled in March 2009 after KNPC came under political pressure to shelve them.

One source close to KNPC’s parent company, Kuwait Petroleum Company, says that the amount of money being spent on the Mina al-Ahmadi refinery, which was built in 1949 and was due to be decommissioned once the new refinery was operational, is a sign that the company is worried about its ability to push ahead with the Al-Zour scheme and is “hedging its bets”.