Mongolia to break ground on first refinery this year

The government of Mongolia has said construction on the country’s first refinery will begin this year on 150 hectares in Altanshiree in the Mongolian province of Dornogovi.

With the feasibility study for the refining project scheduled to be completed by the end of this quarter, construction works are planned to start during the second quarter, according to separate releases from the government of Mongolia and Montsame, the country’s news agency.

Alongside building the refinery, state-owned enterprises and organisations will also work on construction of an electric power transmission line as well as 20 kilometres of railway and roadway to connect the manufacturing site to nearby Sainshand.

Supported by a US$1-billion soft credit line to Mongolia from India announced in May 2015, the new refinery comes as part of India’s effort to develop further ties with the landlocked country and help reduce its energy dependence on neighbouring China and Russia, according to Indian government news agency reports in late December 2017.

Engineers India Ltd has been selected to deliver the detailed project report for construction of the refinery, which will be operated by a public company and could boost Mongolia’s GDP by 10%.

Designed to process Mongolia’s own shale crude production currently exported to China, the proposed 1.5 million-tonne/year refinery will produce about 560,000 tpy of gasoline, 670,000 tpy of diesel, and 107,000 tpy of liquefied gas for domestic use, helping to reduce finished petroleum product imports from Russia, according to local media reports from Mongolia and India.

A precise timeframe for start-up of the new refinery has yet to be disclosed