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  • Writer's pictureEwen Levick

India pressures Mongolia to complete oil pipeline on time

The Indian government has reaffirmed its commitment to building Mongolia's first oil refinery, but has also subtly pressured the Mongolian government to ensure an accompanying pipeline is constructed on time.

In a video conference with Chief Cabinet Secretary L. Oyun-Erdene and Mining Minister G. Yondon, India's Union Minister of Petroleum and Natural Gas & Steel, Shri Dharmendra Pradhan, said that he hoped Mongolia would finish connecting a crude oil pipeline to the refinery 'well before' it is opened.

The refinery will be small by international standards but should meet domestic requirements. (Unsplash)
The refinery will be small by international standards but should meet domestic requirements. (Unsplash)

The refinery, which is largely funded by the Indian government through a line of credit extended during high-level visits in 2015, is being built in Altanshiree in Dornogovi province. It is scheduled for completion in 2022.

Despite producing and exporting thousands of barrels of oil per day, Mongolia depends on imports of finished petrochemicals from Russia to meet domestic demand.

The Mongol Refinery Project, as it is known, aims to reduce this dependence.

Interestingly, the refinery is apparently the largest project India is undertaking through its Lines of Credit program, which suggests New Delhi is keen to strengthen ties with Ulaanbaatar. The project is managed by the state-owned Engineers India Ltd.

However, the fact that the Indian government has gone public with its request for Mongolia to complete the pipeline before the refinery opens suggests it may be concerned about project slippage.

Pradhan said he "sought [Oyun-Erdene and Yondon's] cooperation in completing this pipeline well before the commissioning of the Refinery project."

In exchange, Pradhan indicated that India hoped to gain greater access to Mongolian mineral supplies.

"“We look forward to substantial partnerships with Mongolian companies in the areas of minerals, coal and steel," he said.


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