Улаанбаатар
Construction of Oil Refinery at 50 Percent Complete
Economy
Ulaanbaatar, December 23, 2025 /MONTSAME/. Mongolia is building its first major oil refinery in Altan Shiree soum of Dornogobi aimag with a soft loan worth about USD 1.7 billion from the Export-Import Bank of the Republic of India.
The construction work is being carried out in four phases, and as of today, the project is 50 percent complete. In addition, the crude oil pipeline project is 90 percent complete, reported Executive Director of Mongol Refinery LLC Altantsetseg Dashdavaa. In accordance with the intergovernmental agreement between the two countries, the plant is scheduled to become operational in 2028. However, due to the government and the Ministry of Industry and Mineral Resources’ efforts to accelerate the construction, it is planned to be commissioned a year ahead of schedule.
Minister of Industry and Mineral Resources Damdinnyam Gongor said, “During the fuel and oil products crisis, Mongolia relies 95 percent on Russia and 5 percent on China — in other words, we were fully dependent on foreign suppliers. The way out of this dependence is to build a domestic oil refinery. Once the plant becomes operational, Mongolia will be able to meet about 50 percent of its domestic demand for oil products. The main challenge now is securing raw materials. Our ministry is focusing on this issue, and we plan to hold talks with PetroChina to find a solution.”
As of today, construction of the pipeline racks for the
primary processing facilities and the foundation concrete work for the furnaces
of the atmospheric and vacuum distillation units have been completed.
Meanwhile, installation works are continuing on the pipeline racks,
substations, and buildings intended for control and server operations within
the auxiliary and support facilities.
In addition, officials reported that construction of the
storage tank park, pipeline racks, substations, and the foundations for the
plant’s power plant control system and substation buildings is underway, with
the main structural works nearing completion. The majority of the plant’s
technological equipment is being manufactured by nearly 20 companies in India.
