Engineers India Ltd (EIL) will begin construction of the long-awaited oil refinery in Mongolia. EIL, a PSU under the Indian Ministry of Petroleum and Natural Gas, is the project management consultant for the development of the oil refinery.

During an ongoing visit to Mongolia, Petroleum and Natural Gas Minister Dharmendra Pradhan finalised the roadmap to commence construction of the refinery, which is being touted as the largest project being undertaken by the government of India under its Lines of Credit programme.

The petrochemical refinery – near Sainshand in southern Dornogovi Province is to be built at an approximate cost of USD 1.25 billion. It is being developed under a line of credit of USD 1.236 billion extended by India during Prime Minister Narendra Modi’s visit to Mongolia in 2015 and subsequently enhanced during the state visit of the President of Mongolia Kh.Battulga to India in September 2019.

The refinery is expected to be completed by 2022 and will help Mongolia to cut some of its dependence on Russian fuel. Though Mongolia is self-sufficient in oil and has its own oil fields, almost all of its crude oil is exported and all of its finished petrochemical products are imported. The refinery will reduce Mongolia’s import dependence and will ensure energy security for the country.

The refinery is expected to have a capacity of 1.5 mmtpa (million metric tons per annum), with diesel and gasoline as the primary products and LPG (liquefied petroleum gas), fuel oil and jet fuel being produced as secondary products.