A refinery backed by India will become fully functional in Mongolia by 2028. Nearly 2,500 Indians are at present in Mongolia to give shape to this project, which will reduce the country’s import dependence by half. This would be Mongolia’s first oil refinery, being built with a $1.7 billion Indian line of credit and will have the capacity to process 1.5 million tonnes of crude oil annually, or 30,000 barrels per day.
The refinery is located in the Dornogovi province and will meet the local fuel demands like petrol, diesel and LPG. The project is being executed by Megha Engineering & Infrastructure Limited (MEIL), which has almost completed the civil work. This is a government-to-government project, and the construction will factor in the extreme weather conditions, which range from -35 degrees Celsius to 40 degrees Celsius.
The three distinct modules of the project include an integrated crude distillation unit (CDU, with a capacity of 1,500 kt (kilo tonnes) per annum), a vacuum distillation unit (VDU, with 823 kt pa) and a saturated gas plant (SAT GAS). Now, encouraged by the progress of the refinery, Mongolia wants India to explore its oil & gas reserves. The work on the refinery has been underway for a few years, but the announcement of it being on track was made only during the recently concluded visit to India by the Mongolian President Khurelsukh Ukhnaa. The refinery equipment is being manufactured in India and will be shipped to Mongolia.
Energy security
“The refinery will strengthen Mongolia’s energy security,” affirmed Prime Minister Narendra Modi. “It is India’s largest development partnership project globally”. Private Indian companies were exploring new possibilities of co-operation in energy, critical minerals, rare-earths, digital projects, mining, agriculture and dairy products, amongst other areas, he added.
India is also looking to import coking coal from the landlocked country wedged between Russia and China. Russia and Mongolia have a discount deal for Mongolian goods transiting through Russia via its railway and seaports. “India and Mongolia are third neighbours and our bilateral relations are strengthening,” Atul Malhari Gotsurve, India’s ambassador to Mongolia, told Business India. “From Parle G biscuits to Royal Enfield bikes and Dabur and Himalaya products – all are household names in Mongolia. Besides, in a bid to promote tourism, e-visa for Mongolia has been made free.’’
India and Mongolia also signed 10 MoUs, including co-operation in humanitarian aid, the restoration of heritage sites in Mongolia, immigration, geology and mineral resources, the promotion of co-operatives, and the sharing of digital solutions. Mongolian President, while thanking India for its contribution to his country’s economic growth, also praised India for its global energy transition and expressed interest in joining the International Solar Alliance. He also visited the Swaminarayan Akshardham temple in Delhi and offered prayers.
“The bond between the people of India and Mongolia traces back to the time of the Hunnu Empire,” said President Khurelsukh Ukhnaa. “This historic visit celebrates the shared heritage of faith, culture and universal values connecting India and Mongolia’’.
“Our defence and security co-operation is also steadily strengthening,” concurred PM Modi. “We have launched several new initiatives – from training programmes to the appointment of a defence attaché at the embassy. India will also launch a new capacity-building programme for Mongolia’s border security forces”.
India and Mongolia already had joint defence exercises. “They are interested in such activities and see a lot of benefits in training with us,’’ said an official from the ministry for external affairs (MEA).
PM Modi also highlighted common Buddhist links between India and Mongolia. “Today, we made several important decisions to strengthen this tradition and our historic ties further,” he remarked. “I am happy to announce that, next year, the holy relics of two great disciples of Lord Buddha – Sariputra and Maudgalyayana – will be sent from India to Mongolia.” A majority of Mongolians are Buddhists, and they charter flights to Amritsar and drive down to Dharamsala to get an audience with the Dalai Lama, since there are no direct flights between the two nations as of now.
Meanwhile, a commemorative stamp was released, marking 70 years of diplomatic relations between India and Mongolia.