The oil terminal will be built on Qeshm Island in southern Iran and is expected to turn it into a major hub for oil production and storage, Sputnik reported.
The report added that $550 million contract of the terminal has been signed between 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 capable of storing 10 million barrels of light, heavy and ultra-heavy crude oil produced in Iran's West Karoun region.
The oil terminal will be large enough to store an estimated 30 million barrels of crude.
Covering an area of 1,491 square kilometers north of the Strait of Hormuz, Qeshm Island is the largest in the Persian Gulf.