China and Iran have agreed to jointly build an oil terminal in the Gulf, China’s People’s Daily Online has reported.
The oil terminal will be built on Qeshm Island in the southern part of the Gulf and will turn the island into a major centre for oil production and storage.
The $550mn contract was signed by Iran’s Machine Making Co. and China’s largest heavy industry enterprise.
After the completion of the first stage of the joint project Qeshm Island will be able to store 10mn barrels of light, heavy and ultra-heavy crude oil produced in Iran’s West Karoun region.
The oil terminal will be large enough to handle tankers up to 140 metres deep and store an estimated 30mn barrels of crude.
In keeping with a 10-year lease contract the terminal will generate an annual revenue of up to $300mn.
Covering an area of 1,491 square kilometres north of the Strait of Hormuz, Qeshm Island is the largest in the Gulf.
Iran also plans to set up a financial center on Qeshm Island as a gateway for foreign banks and other institutions to enter its domestic market, Bloomberg reports.
Several Chinese and Russian banks have already expressed interest in opening offices on the island.
