Mongolia to get new refinery by 2014
Marubeni Corp and Toyo Engineering are bringing progress to Mongolia, with reports emerging that the two Japanese firms will 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 finalized by year-end, is estimated at 600 million dollars, or about 50 billion yen.
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 gasoline for local consumption.
Feedstock for the refinery will from crude oil transported by rail from Russia and Kazakhstan. The refinery’s output will supplant Russia as the source of the country’s oil products.
Domestic demand for oil products [See chart] is projected to expand 5-7% a year, especially as more people in the country are driving cars. But there’s more to the demand than just 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.
“The refinery will reduce Mongolia's dependence on oil products imports from Russia and will help to fuel its rapidly expanding mining sector, the main driver of its economic growth, which averaged 11.4% over the five years prior to the global economic downturn,” the analyst said.
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 finalized by year-end, is estimated at 600 million dollars, or about 50 billion yen.
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 gasoline for local consumption.
Feedstock for the refinery will from crude oil transported by rail from Russia and Kazakhstan. The refinery’s output will supplant Russia as the source of the country’s oil products.
Domestic demand for oil products [See chart] is projected to expand 5-7% a year, especially as more people in the country are driving cars. But there’s more to the demand than just 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.
“The refinery will reduce Mongolia's dependence on oil products imports from Russia and will help to fuel its rapidly expanding mining sector, the main driver of its economic growth, which averaged 11.4% over the five years prior to the global economic downturn,” the analyst said.
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