Japan-based Toyo Engineering and other unnamed local companies will be building Mongolia’s first oil refinery by 2015 at a cost of $600m.

The first refinery to be constructed in the Darkhan city, in Darkhan-Uul Province is expected to have a capacity to process two million metric tons of oil per year.

Mongolia is undertaking the project with the intention to reduce the country”s dependency on Russian imports for gasoline and other oil products, reported Bloomberg.

In February 2013, the companies are scheduled to discuss the funding aspect of the project with some Japanese banks. The investment in the facility can reportedly be reimbursed in four years.

Construction of the refinery is anticipated to be completed in three years, and the domestic production is expected to reduce the gasoline prices by 6% to 8%.

With no domestic refining facility, almost all of Mongolia”s gasoline and oil products are imported from Russia.

Source : Energy Business Review