Vitol, the world's largest energy trader, has announced plans to build an oil import and distribution terminal in Cyprus.

Vitol Tank Terminals International (VTTI), a wholly owned subsidiary of Vitol Group, said it expects the project to be completed by 2012 at an initial cost of more than 100 million euros ($127.6 million).

The terminal in the southern coastal region of Vassiliko would provide 340,000 cubic metres of storage for gasoline, diesel, jet fuel and fuel oil.

"This terminal will turn Cyprus into a regional oil product hub allowing us to export products from this terminal into other parts of the east Med," VTTI CEO Rob Nijst told a news conference in the Cypriot capital Nicosia.

The terminal facility would hold 20 tanks and construction was expected to be complete in the second half of 2012, VTTI said. In addition to storage tanks, a jetty would also be constructed to handle seagoing vessels.

Vassiliko is already an industrialised area and will be the hub of a liquefied natural gas regasification facility and storage terminal managed by the island's electricity authority, EAC. The EAC is seeking a strategic partner for that project.

Worldwide, VTTI owns more than 5 million cubic metres of storage, which it hopes to grow to exceed 8 million cubic metres by 2013, Nijst said.

Last month Vitol agreed to sell 50 per cent of VTTI to Malaysia's MISC, an international shipping line, for $735 million. The deal had yet to close as of July 21.-Reuters