Iran To Build New Oil Terminal Outside Gulf

As tensions between Iran and the Gulf States continue to increase, Tehran has announced plans for a new oil terminal outside the Strait of Hormuz.

Iran had previously threatened to block the Strait of Hormuz, following a tense standoff with Israel and the West over the Islamic Republic's uranium enrichment programme.

The Iranian oil ministry has now warned that it plans to build a new terminal to protect its oil exports against potential problems in the Gulf and to boost shipments of Caspian oil, providing an alternative option for Iran's main export terminal at Kharg Island.

The Shana web site quoted the head of the Iranian Oil Terminals Company (IOTC), Pirouz Mousavi, as saying the new terminal would be built at Bandar Jask, on the Gulf of Oman on the south coast of Iran.

"In the event of any type of problem in exporting crude oil from the Kharg terminal, this terminal can provide back up for exports," Mousavi said.

The new terminal would be connected to the Caspian Sea port of Neka using a one million barrel a day pipeline, the report added.

According to Mousavi the terminal would have a storage capacity of 20 million barrels and could cost up $2.2 billion to build.

Iran's announcement came just a few weeks after the United Arab Emirates announced earlier this month they had completed work on a new strategic oil pipeline bypassing the Strait of Hormuz.

The new pipeline is set to transport oil between Habshan oil field in Abu Dhabi and Fujairah.

Though the 370km Abu Dhabi Crude Oil Pipeline has faced numerous delays, UAE officials said in May they hope to start exporting oil via the pipeline within the next three months.

The pipeline will initially have a capacity of around 1.4 million barrels per day (bpd), officials said.