Iranian and Chinese companies are set to cooperate on the construction of a 30 million barrel capacity oil terminal on Iran's Qeshm Island.
Iran is moving forwards with its plan to develop Qeshm Island with a host of new facilities - including a bunkering operation being billed as "the biggest of its kind in the Persian Gulf."
Following a recent decree, Iranian and Chinese companies are now set to cooperate on the construction of a 30 million barrel capacity oil terminal on Iran's Qeshm Island, according to Russian media reports.
The $550 million project will see the creation of a storage facility for light, heavy, and ultra-heavy fractions of crude oil from Iran's West Karoun oil fields.
It is reported that the first stage of the project will result in the construction of storage facilities with a 10 million barrel capacity, as well as a sea terminal that will be able to accommodate tankers of up to 140 metres.
Experts suggest that the effect of the new investment in Qeshm will not be realised until Iran is able to increase its production capacity
Banks from China, Russia, and Japan are reported to have expressed interest in investing in the project.
However, experts suggest that the effect of the new investment in Qeshm will not be realised until Iran is able to increase its production capacity.
"A new terminal will not shift the balance of power. The terminal at Qeshm has been discussed since 2006... Iran is not at full oil production capacity yet and will need international oil companies to help build that capacity," said Willy Olsen, an associate fellow at London's Royal Institute of International Affairs.
"As we have seen in recent months, the new Iranian terms are not yet approved. No oil company has signed on to the new terms yet."
As Ship & bunker previously reported, Qeshm Star fuel delivery Co. (Bunkering) has plans to supply 500,000 to 700,000 metric tonnes (mt) of bunkers per year at a new bunkering operation on the island, according to a report by Iran-based IranOilGas.com.