Mongolia has begun constructing its first Oil Refinery Plant, financed by a soft loan from India. The project, which will process 1.5 million tons of crude oil annually, has entered a contract with MEIL for construction. It involves advanced technological facilities licensed from prestigious international companies, with a timeline of 36-38 months for completion.
The construction of Mongolia’s first Oil Refinery Plant, with an annual capacity of processing 1.5 million tons of crude oil, is underway in Altanshireet soum, Dornogobi aimag. This project is financed by a soft loan from the Indian government. On February 6, 2025, the state-owned Mongol Refinery LLC signed an Engineering, Procurement, and Construction (EPC) contract with Megha Engineering and Infrastructure Limited (MEIL), which will handle the construction of the final technological facilities.
The oil refinery will incorporate 12 technological facilities, seven of which will focus on deep processing. MEIL is responsible for building these deep processing facilities under licensing agreements with major international firms. Notable technologies include hydrogen production from Italy’s Kinetics Technology and sulfur separation licensed from France’s Axens. Additionally, various gas processing and hydrocracking technologies will be implemented by UOP Honeywell from the US.
The construction timeline set by MEIL, which has over 30 years of experience in international petrochemical projects, is 36-38 months. The total project cost is approximately $1.7 billion, including four work packages covering both technological and non-technological structures. Initial package works, covering nine facilities and infrastructure groundwork, were completed and approved in November 2024.
Currently, foundational work for various plants, including the thermal power plant substation, is progressing and is nearing completion. Over 1,000 engineers and specialists from multiple countries are contributing expertise to the project, bringing a diverse range of international perspectives to this significant national endeavor.
Mongolia aims to develop its oil refining capacity to enhance energy independence and reduce reliance on imported petroleum products. The establishment of the oil refinery not only signifies economic progress but also positions Mongolia strategically in terms of energy security. By integrating advanced technologies from renowned international firms, the project ensures that it meets modern efficiency and environmental standards, while improving local job opportunities in related sectors.
The signing of the EPC contract marks a pivotal moment in Mongolia’s energy sector, as the first oil refinery is set to utilize state-of-the-art technology and international collaboration to refine crude oil domestically. The project’s completion will facilitate economic growth and energy independence for Mongolia, while providing valuable employment opportunities.
Original Source: montsame.mn
