CARACAS - Venezuelan state company Bolivarian Ports (Bolipuertos) and the China Harbor Engineering Company (CHEC) on Tuesday signed an agreement to build a container terminal in Venezuela's main port of Puerto Cabello in the northern state of Carabobo.

The project is based on a memorandum of understanding signed between Caracas and Beijing in September 2010.

The contract was signed by Venezuela's Transportation and Communications Minister Francisco Garces and Chen Zhong, CHEC's vice chairman, the official Venezuelan News Agency reported, adding the budget for the new terminal is about $520 million.

"This terminal will double the capacity we have and will be connected with the railway network we are developing. This terminal undoubtedly will allow shipping out and bringing in merchandise to and from the Caribbean Sea and the rest of the world," said Garces.

The new terminal will extend the cargo loading and storage area by 38 hectares, and add a space for the docking of two more container ships with a capacity of 70,000 tons and six mechanical arms for loading and unloading merchandise.

Garces said the construction of the terminal in Carabobo, which is located about 200 km northwest of Caracas, is scheduled to begin in 2012. The new terminal should be fully operating in 2014.

Venezuela nationalized the country's port management in 2009 in order to modernize the overall port installations which were last updated in 1970.