Reuters- Iran and China will sign a $3 billion contract next month to upgrade Iran's oil refining capacity, according to Iran's Mehr News agency.

Iran�s deputy oil minister Abbas Kazemi said in Tehran on Tuesday that the deal will focus on upgrading the Abadan oil refinery, Mehr said.

�Last week, China officially opened the financing for the plan to fix and improve the quality of the Abadan refinery,� Mehr quoted Kazemi as saying.

Iran's refineries are in a state of disrepair after years of sanctions which prevented access to parts and new technology.

The deal is expected to be signed when a delegation of Chinese oil officials visit Tehran next month, Kazemi said, according to Mehr News.

(Reporting By Babak Dehghanpisheh; Editing by Susan Fenton)