Construction of Mongolia’s first oil refinery in southeastern Dornogovi Province will begin later this month after the ground-breaking ceremony. The event will take place on 22 June in Altanshiree Soum (district) and will be attended by Mongolian Prime Minister U.Khurelsukh and Indian Minister for Home Affairs Rajnath Singh along with other officials.

The project, which is of great importance to the Mongolian economy, is being financed by a loan from India, which was announced during a visit to the country in 2015 by Indian Prime Minister Narendra Modi.

The refinery will have a processing capacity of 1.5 million tons of oil per year and will annually produce 560,000 tons of gasoline and 670,000 tons of diesel fuel, as well as 107,000 tons of liquefied gas. The refinery, to be ready for operation by 2022, is expected to boost Mongolia’s gross domestic product by 10 percent.

Because Mongolia currently has no refining capacity, it has to export its  crude oil to China while importing practically all of its petroleum products from Russia.