Kuwait signed a $1.1 billion deal with South Korea's Hyundai Engineering and Construction Company and local firm Kharafi Group to design and build a port near the Iraqi border.

The commercial port on Boubyan Island is expected to be operating with an initial four berths in 2015, the ministry of public works and municipal affairs said in a statement on Wednesday.

The facility is part of a plan to develop the island into a commercial seaport in a bid to position the Gulf state as a main gateway for Iraq's reconstruction and to regain its 1970s status as a regional hub.

The contract with the South Korean and the Kuwaiti companies includes dredging works, designing 16 berths and building four of them, the statement said.

The project is being offered to contractors in phases, and is envisaged to eventually have 60 berths, it added.

Boubyan Island measures 850 square kilometers in low tide and 400 sq km in high tide. Parts of it will be a natural reserve, and there are plans for building tourist attractions on it, according to the ministry.

Opec Kuwait, which is looking to diversify its oil-dominated economy, has three oil ports and three commercial ports.-Reuters