India, Mongolia to sign pact for petrochemical refinery

13 May 2019

India and Mongolia are expected to sign an agreement this week for the construction of Mongolia’s first petrochemical refinery that is expected to cut some of its dependence on Russian fuel. The project will be the largest being undertaken by the government of India under its Lines of Credit programme.

The petrochemical refinery near Sainshand in southern Dornogovi province is to be built at an approximate cost of USD 1.25bn utilizing the USD 1bn line of credit announced during Prime Minister Narendra Modi’s visit to Ulan Bator in 2015. It is expected to be completed by 2022.

The capacity of the refinery will be 1.5 mmtpa, with diesel and gasoline as the primary products and LPG, fuel oil and jet fuel being produced as secondary products.

According to news reports, products from the Mongolian refinery could be sold to China. Mongolia’s big southern neighbour produces around 3.8 million bpd of crude, and imports more than 9 million bpd, according to official government data. Mongolia produced 7.6 million barrels of oil in 2017, about 21,000 bpd, amounting to 6% of its total export earnings.

Besides the petrochemical complex, India will also be taking up work for the construction of 27kms of the railway line, 17.5kms of road and 19kms of the power transmission line to connect the refinery to existing networks. These are to be completed by September 2019.

Petrochemical refinery plant

Image Source: Google