India-backed oil refinery in Mongolia to begin operations by 2028

New Delhi: Mongolia’s first oil refinery, being supported by a Line of Credit extended by the Government of India, may start operations by 2028, four years behind schedule, and lessen the landlocked East Asian nation’s dependence on imports from Russia and China.

“The oil refinery project, supported by India's $1.7 billion Line of Credit, will strengthen the energy security of Mongolia,” Prime Minister Narendra Modi said after a meeting with President Khurelsukh Ukhnaa of the East Asian country in New Delhi on Tuesday.

The construction of the refinery started in 2018. Though it was expected to be completed by 2024, the construction was delayed.

“Almost all the civil work is over. The refinery equipment is being manufactured in India and will be shipped to Mongolia. It seems to be on track, and we expect that by 2028, the refinery should be in operation,” P Kumaran, Secretary (East) at the Ministry of External Affairs, told journalists in New Delhi.

He was briefing the journalists about the meeting between Modi and Khurelsukh. “The Mongolians want to use their own crude, which is mostly exported now, to be fed into this refinery so that they can be as energy independent as possible. That is something we want to support, and we hope to see this through by 2028,” added Kumaran.

Modi noted that defence and security cooperation between India and Mongolia was also steadily strengthening. “We have launched several new initiatives, from training programs to the appointment of a Defence Attaché at the Embassy. India will also launch a new capacity-building program for Mongolia's border security forces,” he added.

"It is a deep, soulful, and spiritual bond. The depth and scope of our partnership is reflected in our people-to-people ties," said the president of Mongolia. “Both our countries share the age-old bond of Buddhism, which is why we are also called spiritual siblings," he added.