Mongolia Refinery to be Constructed by 2014

Marubeni Corp and Toyo Engineering are reported to have teamed up to construct a new oil refinery by 2014.

Marubeni Corp. and Toyo Engineering have reached a basic agreement with a local petroleum company to build the 44,000-b/d facility in the northern city of Darkhan. The deal, which may be finalised by year-end, is estimated at us$600 million, or about Yen50 billion.

Toyo Engineering will handle construction while Marubeni will manage the project and procure materials and equipment. According to reports, the refinery will be able to produce about 1 million tons of diesel and 600,000 tons of fuel for local consumption. The refinery will use crude oil transported by rail from Russia and Kazakhstan.

Domestic demand for oil products is projected to expand 5-7% a year, especially as more people in the country are driving cars. According to analyst BMI, the new refinery will have a “significant impact” on Mongolia's energy industry, making it self-sufficient in fuels and helping to power the mining industry, the main driver of the country’s economic growth.

PETROLWORLD 05/10/2010