Mongolia, which is forced to import virtually all of its refined oil products and frequently faces chronic fuel shortages, is to begin building an oil refinery early next year in an effort to meet domestic demand and reduce dependence on neighboring Russia for energy supplies.
Two months ago Mongolian President Tsakhia Elbegdorj proposed to build an oil refinery, emphasizing its importance for Mongolia, infomongolia.com reported.
Construction on the refinery began on 11 August in the southeastern city of Saishand in Dornogobi province in cooperation with Mon L Gas LLC. The Saishand refinery will process 5,000 tons of crude oil per year. The Mongolian government granted SODMONGOL a license to construct the facility in 2008. Mongolia’s domestic oil consumption is currently less than one million tons per year.
At present Mongolia receives its fuel supplies from Russia, but since April imports have been curtailed because of Russia's soaring domestic demand. Accordingly, the Mongolian government eventually intends to construct a total of three refineries.
The second will be located in Darkhan-Uul. Built with the cooperation of Mongol Seku LLC, the Darkhan-Uul refinery will have an annual processing capacity of 200,000 tons per year. The third, to be built in Zuunbayan in Dornogobi province, is slated to have an annual production capacity of 300,000 tons.
By. Joao Peixe, Deputy Editor OilPrice.com
Joao is a writer for Oilprice.com