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Contract of oil refinery plant signed in the final stage

The construction of the first Oil Refinery Plant of Mongolia with a capacity to process 1.5 million tons of crude oil per year is progressing in Altanshireet soum of Dornogobi aimag. The project is financed by a USD 1.2 billion soft loan from the Government of India.

On September 29, 2023, Dr. D. Altantsetseg, Executive Director of the state-owned company “Mongol Refinery” LLC, and P. Rajesh Reddy, President of the Hydrocarbons Division of Megha Engineering & Infrastructure Limited (MEIL), signed the Contract for the EPC-04 package, which is the last of the four EPC packages for the Oil Refinery Plant. The Oil Refinery Plant will have seven deep processing and conversion technology facilities, each requiring specific licenses from the patent owners called licensors. The EPC-04 package consists of the construction of the licensed technology facilities.

MEIL Managing Director PV Krishna Reddy, officials, dignitaries, and representatives from the two countries were present at the Contract Signing Ceremony.

Executive Director D. Altantsetseg emphasized, " The winners of the tenders will be responsible for the general plan, blueprint, procurement, and the construction. In addition to simple and vacuum distillation facilities, deep processing technology means dealing with how to break down the heavy residue of during the distillation and what technology to use to affect the atomic and molecular level in order to increase the yield of well refined oil. To put it another way, it is vital to maximize the production of gasoline, diesel, and jet fuel, which are the main products of the plant."

“Mongol Refinery” LLC conducted competitive bidding process among various multinational oil and gas companies to obtain the licenses for the technological units. After two years of intensive negotiation, they reached agreement and signed Contracts with companies such as Honeywell UoP, Axens, Shell, and Kinetics Technology in 2022. Since signing of the Contracts, companies completed the Basic Design and Engineering Packages for their licensed units and will also provide its proprietary equipment and other supplies as well as training and mandatory services.

"Megha Engineering and Infrastructures Limited" was also selected as the main Contractor for EPC 02 and 03 packages and the site works are ongoing.

MEIL Managing Director Krishna Reddy said, "MEIL's new venture marks its third foray into the region. It involves the construction of the country's first greenfield Mongol Oil Refinery project, a significant undertaking. Within this refinery, MEIL is overseeing the construction of EPC-2, which encompasses open art units, utilities, offsites, and plant buildings valued at USD 598.90 million. Additionally, MEIL is constructing captive power plants for the EPC-3 phase, valued at USD 189.72 million, and USD 648 million for the new EPC-4 project. The company is using cutting-edge technology in the construction of all the projects."

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