India backed oil refinery in Mongolia to begin operations by 2028

Mongolia’s first oil refinery, supported by a $1.7 billion Line of Credit from the Government of India, is expected to commence operations by 2028 four years behind the original schedule. The facility aims to reduce the landlocked East Asian nation’s heavy dependence on fuel imports from Russia and China.“Almost all the civil work is over. The refinery equipment is being manufactured in India and will be shipped to Mongolia. It seems to be on track, and we expect that by 2028, the refinery should be in operation,” stated P. Kumaran, Secretary (East) at the Ministry of External Affairs. “The Mongolians want to use their own crude, which is mostly exported now, to be fed into this refinery so that they can be as energy independent as possible. That is something we want to support, and we hope to see this through by 2028,” he added.
The refinery project, a key pillar of India-Mongolia energy cooperation, has made substantial progress, with nearly all civil construction completed. The equipment being produced in India will soon be shipped to Mongolia for installation. The project, which began construction in 2018 and was initially slated for completion in 2024, faced delays due to logistical and technical challenges but is now reportedly on track.The refinery will process Mongolia’s own crude oil, which is currently exported, thereby advancing the country’s goal of achieving greater energy independence. The initiative is also expected to boost industrial development and create new employment opportunities in the region.
Prime Minister Narendra Modi emphasized that the refinery project would play a crucial role in strengthening Mongolia’s energy security. During his meeting with Mongolian President Khurelsukh Ukhnaa in New Delhi on Tuesday, Modi reaffirmed India’s commitment to supporting Mongolia in achieving self-reliance in the energy sector.Defence and security cooperation between the two nations is also deepening, with India launching new initiatives, including training programs and the appointment of a Defence Attaché at its embassy in Ulaanbaatar. Additionally, a new capacity-building program for Mongolia's border security forces will be introduced as part of broader bilateral engagement,according to information.President Khurelsukh highlighted the strong cultural and spiritual ties that underpin the India-Mongolia partnership, describing the relationship as one of “spiritual siblings” bound by the shared heritage of Buddhism. He noted that the deep and enduring friendship between the two nations continues to expand across sectors, reflecting mutual respect and cooperation.