In­dian fi­nanced oil re­fin­ery ex­pected to start con­struc­tion in 2018

The UB Post - - BUSINESS & ECONOMICS -

Mon­go­lia’s first oil re­fin­ery is ex­pected to launch con­struc­tion in 2018 with fund­ing from In­dia’s one bil­lion USD soft loan. En­gi­neers In­dia Limited (EIL) has de­vel­oped the de­tailed project re­port of the re­fin­ery while the Mon­go­lian Oil Re­fin­ery will work as the fo­cal agency of the project.

In­dia has pro­vided a line of credit, which in­cludes a 700 mil­lion USD loan for the oil re­fin­ery and 264 mil­lion USD for oil pipelines. The loan was an­nounced dur­ing Prime Min­is­ter Naren­dra Modi's visit to Mon­go­lia in 2015. The 20-year loan will have an in­ter­est rate of 1.75 per­cent and prin­ci­pal pay­ments will be waived dur­ing the first five years.

The re­fin­ery will have a pro­cess­ing ca­pac­ity of 1.5 mil­lion met­ric tons of oil per year and will an­nu­ally pro­duce 560,000 tons of gaso­line and 670,000 tons of diesel fuel, as well as 107,000 tons of liq­ue­fied gas. The re­fin­ery could boost Mon­go­lia's gross do­mes­tic prod­uct by 10 per­cent. Mon­go­lia cur­rently ex­ports crude oil to China while im­port­ing petroleum from Rus­sia.

"The oil re­fin­ery project will help Mon­go­lia to erad­i­cate or re­duce the de­pen­dency. At the same time, we are very much hop­ing it would help to save a lot of for­eign ex­change and re­al­lo­cate it for other ne­ces­si­ties," G.Gan­bold, the Mon­go­lian Am­bas­sador to In­dia, said.

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