DUBAI, July 18 (Reuters) - Saudi Arabia's finance ministry said on Tuesday that 13 domestic banks had qualified to participate in the government's planned issuance programme for local currency Islamic bonds.

Alinma Bank 1150.SE assisted with structuring the sukuk, the ministry said in a brief statement which did not give further details or specify when issuance would start. It said any issues would be at the ministry's discretion.

Finance minister Mohammed al-Jadaan told Al Arabiya television last week that local currency sukuk issues, designed to help Riyadh cover a large budget deficit caused by low oil prices, would begin this month.

Besides Alinma, the other qualified banks are Alawwal Bank, Al Rajhi Bank, Arab National Bank, Bank AlBilad, Bank AlJazira, Banque Saudi Fransi, Gulf International Bank, Riyad Bank, Samba Financial Group, Saudi Investment Bank, National Commercial Bank and Saudi British Bank.

The ministry did not say how the banks would participate, but commercial bankers said they believed the banks would act as buyers of the bonds in the primary market.

Two Saudi bankers predicted the first sukuk offer would be around 10 billion riyals ($2.7 billion) in size, and that issues might then be made monthly.

A senior finance ministry official estimated in May that local debt issues would cover 25 to 35 percent of the 2017 deficit, which is officially projected at almost 200 billion riyals.

Riyadh launched local currency issues of domestic conventional bonds in 2015 but suspended them late last year after they strained liquidity in the banking system. Liquidity has since improved, and riyal money rates come down, as the government has paid overdue bills to the private sector.

(Reporting by Saeed Azhar and Tom Arnold; Writing by Andrew Torchia) ((andrew.torchia@thomsonreuters.com; +9715 6681 7277; Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))