Mongolia to seek approval from India for oil refinery

Mongolia will soon seek approval from the Import-Export Bank of India to build an oil refinery and pipelines with USD 1B in infrastructure funding negotiated last year, a project that could boost the nation’s gross domestic product by 10%.
The government intends to use USD 700M of the loan for an oil refinery and USD 264M for oil pipelines, according to a statement on its website last week. Mongolian prime minister Erdenebat Jargaltulga has instructed relevant ministries to negotiate with the Ex-Im Bank of India, according to the statement.
Prime Minister Narendra Modi signed agreements last year to provide the USD 1B credit line to fund railroad and infrastructure projects in Mongolia. The Indian Ambassador in Ulaanbaatar Dr. T. Suresh Babu didn’t immediately respond to an email seeking comment. Mongolia is looking to India and other investment partners as its economy contracts and its debt burden grows. Last month, China backed off from talks with Ulaanbaatar over a loan package to help the economy after a dispute over the visit to Mongolia by the Dalai Lama.
The refinery, to be sited in Sainshand county, will have a capacity to process 1.5 million metric tonnes of oil per year. It will produce 560,000 tonnes of gasoline, 670,000 tonnes of diesel fuel and 107,000 tonnes of liquefied gas annually. The refinery could boost Mongolia’s GDP by 10%, according to the statement.

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