Mongolia’s first oil refinery, being built on the outskirts of the capital city, Ulaanbaatar, and funded with Indian assistance, will be completed by 2025, said the country’s Ambassador Dambajav Ganbold.
In an interview with a Livemint, Ganbold said the first stage of Mongol Oil Refinery, built with a $1.2 billion Indian soft loan, will be completed at the end of this year.
The development assumes significance as Mongolia is entirely dependent on Russia for its energy imports and the new refinery at Altanshiree Soum in the country’s Dornogobi province would help Mongolia meet 70 per cent of its demand domestically.
It’s being seen as a major step amid the crisis because of the Russia-Ukraine war and the cost of oil shooting up manyfold.
The project
It was in 2015 during the visit of Prime Minister Narendra Modi to Mongolia that an agreement between the governments was made to establish the first oil refinery in Mongolia.
The Mongol Refinery is being developed under a government-to-government (G2G) partnership between Mongolia and India. It forms part of the Development Partnership Administration initiative of India’s Ministry of External Affairs (MEA).
The project, which is the first greenfield oil refinery in Mongolia, includes a pipeline and a power plant as part of its operations. Upon completion, the refinery will have the capacity to process 30,000 barrels of crude oil per day or 1.5 million tonnes per annum.
Four Packages
The refinery project consists of four packages. The first package, or EPC 1, is more than 70 per cent complete right now and will be completed within this year. It was in 2019 when the construction had started on the first phase of the project.
The remaining three packages have gone through the tender process and Hyderabad-based Megha Engineering and Infrastructures Limited (MEIL) has been selected.
The company would provide would provide EPC (engineering, procurement and construction) services and EPC-3 (captive power plants) at a cost of $790 million using advanced technology. Under the EPC deal, MEIL will build open art, utilities and offsites, along with plant buildings, and captive power plants for the refinery.
Engineers India Limited (EIL) serves as the Project Management Consultant (PMC) for the G2G project.
In the years to come, this refinery will open up a number of employment opportunities, supporting the growth of nearby small industries, and thereby leading to Mongolia’s economic development.