This week, India and Mongolia inked a deal for the construction of first petrochemical refinery in Mongolia. The deal is worth $1.25 billion funded by the Exim Bank of India under the US$ 1 billion Line of Credit (LoC) from India. The construction lies near Sainshand, southern Dornogovi province and is expected to be finished in 2022.
Once finished, the refinery will produce diesel, gasoline, LPG, fuel oil, and jet fuel at a capacity of 1.5 million metric tons per annum (mmtpa). The project is significant for Mongolia to secure its energy security. It also marks its first step for cutting dependence on imported fuels from Russia. Fuels produced in the Mongolian refinery could also be exported to China.
To connect the refinery to existing networks, India will also conduct the construction of 17.5 km of road, 27 km of a railway line, and 19 km of a power transmission line. These constructions will be completed by September this year.
