An Indian business is preparing to construct the nation’s first greenfield oil refinery in the nation’s capital, Ulaanbaatar, which will significantly reduce Mongolia’s reliance on Russian oil imports. The Mongol Refinery Project, which entails the construction of Mongolia’s first oil refinery, has received a letter of authorization. It is being carried out by Megha Engineering and Infrastructures Limited (MEIL), an Indian company with headquarters in Hyderabad.
With the aid of cutting-edge technology, the company will construct EPC-2 (open art units, utilities and offsites, plant buildings) and EPC-3 (captive power plants) in Mongolia for a total of USD 790 million.
The project is a component of the Development Partnership Administration programme of the Indian government’s Ministry of External Affairs (MEA). It will be constructed with a line of credit from the Indian government.
This refinery will provide a number of jobs over the coming years, assisting the expansion of surrounding local businesses and fostering Mongolia’s economic progress.
“This downstream project is of enormous importance and marks a critical turning point in the relationship between India and Mongolia and in MEIL’s expansion strategy in the hydrocarbons sector. In addition, the project will bring economic prosperity and energy independence to Mongolia,” a top MEIL official said.
“Engineers India Limited (EIL) is the project management consultant (PMC) for this G2G partnership project,” it added.
The project intends to reduce Mongolia’s reliance on Russian oil supplies. The Mongol Refinery, Mongolia’s first greenfield oil refinery, is currently being built.
The refinery’s operations include a pipeline and a power plant. Once finished, this refinery will have the capacity to process 1.5 million metric tonnes of crude oil annually, or 30,000 barrels.
By doing so, Mongolia’s reliance on Russian fuel will be lessened, and the nation will be better able to meet its needs for petroleum products like gasoline, diesel, aviation fuel, and liquefied petroleum gas (LPG). Because of the Russia-Ukraine conflict and the dramatic increase in oil prices, it is regarded as a significant milestone in the current crisis.