As the world enters a new year filled with new possibilities, some nations are expressing their intentions to construct new projects that will redefine domestic energy markets for the years to come. One such nation with lofty ambitions is Mongolia, which recently secured the necessary funds to construct its first-ever domestically owned and operated refinery, with some substantial assistance from India in the form of a loan and construction being led by Engineers India, a market leader in the refinery construction sector.
Mongolia is aiming for a new era of domestic oil and gas production
The huge nation of Mongolia has mostly exported all of its crude to China, but recently announced plans to construct and operate its first wholly-owned domestic refinery, which will substantially increase the nation’s refining capacity to reach new levels this year. The Asian energy market has been growing at an astonishing rate during the last few years amid increased demand for locally produced energy resources.
The significant growth of the market in Asia has been led by several nations turning to new and exciting projects that will reshape domestic refining capabilities. Notably, India has been driving the energy market forward through funding and providing construction expertise for several new energy projects in the Asian market.
India is funding the new refining project in Mongolia, eyeing a new future for the Asian nation
Mongolia has secured a substantial line of credit from India to construct the new refinery, while Engineers India will provide the necessary engineering expertise to get the project moving. While neither has disclosed the amount provided, the project is expected to come to fruition sometime this year, according to Engineers India.
Despite calls to diversify the global energy market, Mongolia is aiming for its first domestic entry into the market
The global energy market is in a constant state of change. Among calls to diversify the energy market, some nations, such as Mongolia, are only now aiming for an entry into the domestic oil-producing market. The all-new 1.5 million ton oil refinery is expected to be completed by March this year, according to Engineers India’s leadership.
India is providing a $1.7 billion line of credit to Mongolia for the project, which will assist the eastern Asian nation to use its domestically produced crude to make transport and cooking fuel for local use. The new refinery will be the single largest line of credit project being funded by India anywhere in the world, and it has noted that under its program, India offers concessional interest rates to developing nations.
Notably, it will require those nations that receive funds to meet the condition that 75% of the contracts are signed with Indian companies. Construction began way back in 2019, but has been hampered by the COVID pandemic and harsh weather conditions in the region. The Indian company noted that the conditions have been a challenge, especially because Mongolia is a landlocked nation with a limited number of workers.
The Asian market has been boosted by the news of Mongolia aiming to construct the new refinery, as well as China’s continued growth in the sector.
The future of the conventional energy sector is standing firm
Despite the overwhelming consensus that the energy market needs to divert from conventional energy production toward the renewable energy sector, some nations are standing firm and developing new paths toward increased levels of oil and gas production. China has become a force in the global market, with Sinopec, one of the nation’s largest energy companies, signing an agreement with Algeria to expand the nation’s refining capacity over the coming years, setting the stage for a new era of energy production.
