China and Iran plan to jointly build an oil terminal at a cost 0f $550 million on Qeshm Island in the southern part of the Persian Gulf, a report said.

The contract was signed by Iran's Machine Making Co. and China's largest heavy industry enterprise, reported Iran Daily, China's People’s Daily Online.

The island will be able to store 10 million barrels of light, heavy and ultra-heavy crude oil produced in Iran's West Karoun region with the completion of the first stage of the joint project.

The oil terminal will accommodate tankers up to 140 meters deep and store an estimated 30 million barrels of crude, the report said.