Chinese companies will invest €2.6 billion to build a refinery in the city of Abadan in southwestern Iran.
The new refinery will have an output capacity of 210,000 barrels per day, the Shana news agency reported on Wednesday.
Abbas Kazemi, the managing director of the National Iranian Oil Refining and Distribution Company, said construction operations will be started in the current Iranian calendar year, which began on March 21.
Iran has tried to bring more foreign companies into its energy sector since securing sanctions relief from a November interim agreement to temporarily curb its nuclear activities.
On March 1, Iranian Oil Minister Bijan Namdar Zanganeh said that Iran's oil industry would head forward, with or without sanctions.
The sanctions have not hindered the trend of progress of Iran's oil industry, he stated, adding that the new model of contracts would help the country circumvent the sanctions.
The Iranian government said in April that it would revise how it regulates oil and natural gas contracts, though sanctions must be lifted for their full utilization.
Iran, under the terms of the previous buy-back contracts, paid contractors a set price for oil and natural gas produced. Under the planned new system, state-run energy companies will establish joint ventures with their international counterparts, which will be paid with a share of the output.
