The Direstan terminal is being built on a 177-hectare site on the island's southern coast, and will add just shy of 6.5mn bl to Iran's onshore liquids storage capacity once fully online.
The first phase, which cost 150mn euros to build, includes six 540,000 bl capacity tanks for a total capacity of 3.24mn bl. Construction work on this phase began in December 2019 and was carried out entirely by private-sector contractors. The tanks are suited for storing crude oil, products and gas condensates.
The second phase of the project will add another 3.24mn bl, but through the addition of seven tanks: five with a capacity of 540,000 bl and two with a 270,000 bl capacity. Work on this second phase is scheduled to be complete by the end of the first quarter next year.
Once complete, the Direstan development should raise Iran's total liquids storage capacity to around 102.5mn bl.
In addition, the project also involves the construction of a 22km 16-inch pipeline that links the Direstan terminal to the Gevarzin gas processing plant, in the north of Qeshm Island. Iran says the pipeline can also facilitate the movement of oil and oil products between the Direstan terminal and both the 340,000 b/d Bandar Abbas refinery and 480,000 b/d Persian Gulf Star (PGS) condensate splitter project, which is also in Bandar Abbas.
These storage capacity additions come at a time when Iran is struggling to selling its liquids on international markets due to the US sanctions that were reinstated on its crude, products and condensate in late-2018. But while the country's crude output has been cut by almost 50pc to accommodate its reduced exports, managing its condensate surplus has been more challenging as it is closely associated with gas production from South Pars which is vital for meeting domestic demand.
Iran has ongoing storage capacity expansion projects at both the Pars Special Economic Zone in Bushehr province and Bandar Abbas in Hormozgan province.