Mongolia to construct oil refinery in Sainshand - News.MN

Mongolia to construct oil refinery in Sainshand

Old News! Published on: 2017.04.10

Mongolia to construct oil refinery in Sainshand

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Г. Батмандах
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In March, the Mongolian parliament approved a proposal to establish a state-owned company for constructing an oil refinery. Regarding financing, an agreement between the Mongolian government and  Import-Export Bank of India was reached for a $1bn loan for the construction of the refinery and associated infrastructure. The proposed refinery, to be located in the Sainshand soum (district) in the province of Dornogovi, is forecast to cost around $700m, with a further $264m to be spent on pipelines needed to bring crude to the plant from local fields.

Initial projections have put the facility’s turnover at $1.2bn per year with net profits expected to reach $43m per year, respectively. It is expected that the refinery will cover the investment costs within 8-10 years.

According to the proposal, approved by the Cabinet at the end of last year, the facility will have an annual processing capacity of 1.5m tonnes. Regarding output, this is projected to comprise 560,000 tonnes of petrol, 670,000 tonnes of diesel and 107,000 tonnes of liquefied natural gas.

In addition to saving as much as $1bn a year in import costs, the new refinery could help boost Mongolia’s GDP by 10%, according to statements from the Cabinet. Mongolia has identified 332m tonnes of oil reserves; however, only 42.6m tonnes are technically available for extraction, according to data from the Ministry of Mining and Heavy Industry.

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