Iran is planning to build a new oil terminal on its Gulf of Oman coast that would enable it to export crude without using the Strait of Hormuz.

News reports in Iran said that the Iranian Oil Terminals Company (IOTC) planned to build a $2.2bn terminal at Bandar Jask which would have bunkering capabilities of 20 million barrels of crude oil. The terminal would also be connected to Iran’s Caspian fields through a 1 million barrel-a-day pipeline.

The timeline of the terminal was not made clear and the vast majority of the work would have to be carried out by domestic contractors using locally sourced materials due to UN sanctions.

Iran threatened to block the Strait of Hormuz in January in response to US sanctions on the Central Bank of Iran. An embargo on Iranian oil will start to take effect in the middle of 2012.