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Mongolia is close to achieving an economic development goal that will be a first in the country’s history. An oil refinery is expected to start operations in Mongolia by 2022. The refinery will help Mongolia refine crude oil that is pumped in Mongolia instead of relying on refineries in China. At the same time, the new refinery will reduce dependence of imported petroleum products from Russia.
The new refinery will be operated by a Mongolia public company, and state-owned companies will also construct a new required power line, and a roadway traversing the 20 kilometers to the nearest town.
Mongolia’s overall GDP is projected to increase by no less than 10% due to contributions of the refinery. The plant will be able to process 1.5 million metric tons of crude oil annually, and will produce 560,000 tons of gasoline, and an additional 670,000 tons of diesel and 107,000 tons of natural gas.
Funding for the project comes primarily from India via a special loan secured during India Prime Minister Narendra Modi’s visit to Mongolia in 2015.
Construction will commence in late 2018, and the total project is planned to be completed by 2022.
It is hoped the project will help to lower gas prices in Mongolia, in addition to providing easy access to refined fuel products for Mongolia’s many mining operations. The new refinery is but one more example of the continual progress in Mongolia’s development from a nomadic agrarian society to a modern country with a diverse economy.