Kuwait National Petroleum Co (KNPC) has chosen National Bank of Kuwait's investment banking arm to advise it on financing options for its multi-billion-dollar Clean Fuels Project, the bank said on Sunday.

Part of the country's 30 billion dinar ($104.7 billion) economic development plan, the Clean Fuels Project will upgrade and expand two of the country's largest existing refineries with a focus on producing higher-value products such as diesel and kerosene for export.

NBK Capital has been chosen to evaluate funding requirements and structures for the state-run refiner and will be in charge of raising finance on the best possible terms for KNPC. This will happen over the next 12 months, the statement added.

Contracts worth around $12 billion were awarded in February to international companies including Japan's JGC Corp, Britain's Petrofac and US-based Fluor Corp for construction work on the project.

The Clean Fuels Project is expected to be completed by May 2018 and to be fully operational by the end of 2018, Mohammed Ghazi Al-Mutairi, chief executive of KNPC, told Reuters last week.

Under the project, the capacity of the Mina Al-Ahmadi refinery will drop to 347,000 barrels per day (bpd) from 466,000, while Mina Abdulla refinery's capacity will rise to 454,000 bpd from 270,000.

The reduction in the capacity of the Ahmadi refinery after shutting one of its crude distillation units will be compensated for by adding new units to produce higher-value products.  - Reuters