EIL to soon start work on $1.2bn Mongolian refinery project

Last Updated: Tue, Oct 08, 2019 15:41 hrs
Oil Refinery

New Delhi: Decks have been cleared for state-owned Engineers India Ltd (EIL) to begin construction of a petrochemical refinery in Mongolia.

EIL, a PSU under the Ministry of Petroleum and Natural Gas, is the project management consultant for the development of the oil refinery.

During the ongoing visit to Mongolia, Petroleum and Natural Gas Minister Dharmendra Pradhan is expected to finalise the roadmap to commence construction of the refinery, which is being touted as the largest project being undertaken by the government of India under its Lines of Credit programme.

Sources said that after this visit, firm agreements are expected on work programmes for the refinery.

The petrochemical refinery -- near Sainshand in southern Dornogovi province -- is to be built at an approximate cost of $1.25 billion. It is being developed under a line of credit of $ 1.236 billion extended by India during Prime Minister Narendra Modi's visit to Mongolia in 2015 and subsequently enhanced during the state visit of the President of Mongolia Khaltmaagiin Battulga to India in September.

The refinery is expected to be completed by 2022 and will help Mongolia to cut some of its dependence on Russian fuel. Though Mongolia is self-sufficient in oil and has its own oil fields, almost all of its crude oil is exported and all of its finished petrochemical products are imported. The refinery will reduce Mongolia's import dependence and will ensure energy security for the country.

The refinery is expected to have a capacity of 1.5 mmtpa (million metric tons per annum), with diesel and gasoline as the primary products and LPG (liquefied petroleum gas), fuel oil and jet fuel being produced as secondary products.

Apart from the refinery, India has also developed infrastructure that would support the operations at Sainshand. Construction of 27 kilometres of railway line, 17.5 kilometres of road and 19 kilometres of power transmission line to connect the refinery to existing networks is almost complete and help the refinery operations immediately aftyer production commences.