Mongolia launched construction of its first oil refinery on Friday, a long-awaited project that is funded by India and designed to end the country’s dependence on Russian fuel.

Friday’s ground-breaking ceremony was attended by Mongolian Prime Minister U.Khurelsukh and Indian Minister of Home Affairs Rajnath Singh.

The refinery, in southern Dornogovi province will be capable of processing 1.5 million tonnes of crude oil per year, said a spokesman of Mongol Refinery, the state-owned company building the project. That is about 30,000 barrels per day (bpd).

The refinery will be small by international standards, with most Chinese facilities each processing hundreds of thousands of barrels of crude per day, and India’s Reliance Industries running one refinery at a record 1.2 million bpd.

Still, Mongolia’s new refinery, planned for completion in late 2022, will meet all of the nation’s demand for petrol, diesel, aviation fuel and liquefied petroleum gas (LPG).

Mongolia imported almost 1.5 million tonnes of oil products last year, virtually all from Russia. They amounted to 18 percent of all Mongolia’s imports, according to official data.

The cost of the refinery is estimated at USD1.35 billion, and it will include a pipeline and its own power plant. The refinery will process Mongolia’s own crude oil, which is now sold to China.

Mongolia produced 7.6 million barrels of oil last year, about 21,000 bpd, amounting to 6 percent of its total export earnings. The country’s petroleum industry regulator is expecting its crude oil output to rise over the years prior to the refinery’s start-up.

The refinery’s financing is part of a USD 1 billion credit line agreement between Mongolia and the Export-Import Bank of India, made during a 2015 visit by Indian Prime Minister Narendra Modi.