State-owned Kuwait Oil Co said on Tuesday it signed a deal with Italy's Snamprogetti SpA worth 179.4 million dinars ($676 million) to build a gas facility.

The deal was to build a gas booster station in southeastern Kuwait which would produce 500 million cubic feet per day (cfd) in 36 months, the Kuwaiti oil company said in a statement. Five gathering stations would supply the station with gas.

The Gulf Arab state began gas production from several northern fields earlier this month. Gas output was initially scheduled to start in December 2007.

Kuwait needs the gas to meet soaring demand from power plants and industry.

The country aims to boost gas output from the fields to a billion cfd by 2015. Kuwait is in negotiations with Qatar to import liquefied natural gas (LNG). It plans to begin imports next year during summer months to meet peak power demand for air conditioning.

Kuwait is the world's seventh-largest oil exporter and produced 2.58 million bpd of crude in May, according to a Reuters survey. - Reuters