State-refiner, Kuwait National Petroleum Company (KNPC) has approved a KD186.4m ($663.3m) contract to the Dutch dredging firm Van Oord to carry out site preparations ahead of the planned New Refinery Project (NRP) at Al-Zour in the south of the country.

Van Oord’s proposal had been the second-lowest in a 24 November bid round, but was accepted by KNPC over Boskalis Westminster, another Dutch firm that submitted a price of KD165.1m ($587.5m).

The deal is the first phase of development for the NRP. It covers offshore dredging work, backfilling and soil remediation, as well as levelling and reinforcing the 16.2 million-square-metre site to prevent the invasion of seawater by May 2016.

KNPC plans to build a 615,000 barrel-a-day (b/d) refinery to produce low sulphur fuel oil to replace the high sulphur fuel used in Kuwait’s power plants.

KNPC’s parent company, state-owned Kuwait Petroleum Corporation (KPC) is currently conducting studies into integrating two new petrochemicals facilities into the refinery site. This has held back the tenders for the NRP’s main engineering, procurement and construction (EPC) packages, which are expected to be launched later this year, with commissioning slated for early 2019.

Bids are also due on 6 May for a separate deal to build a crude oil pipeline which will feed the refinery.