ABU DHABI — Kuwait has ordered a $1.25 billion oil terminal as part of an effort to increase crude oil production.

The state-run Kuwait Oil Company has signed a contract with South Korea's Hyundai Heavy Industries for the construction of the oil terminal. Under the deal, Hyundai would build the facilities, including oil storage tanks and offshore pipelines, in Al Ahmadi port by June 2008.

The expanded oil terminal would have the capability to produce and export an additional one million extra barrels of crude oil per day, Middle East Newsline reported.

Kuwait has the capability to process two million barrels of crude oil per day. The sheikdom produces a total of 2.7 million barrels per day.