News:India’s oil minister is in Mongolia for the commissioning of the construction of country’s first petrochemical refinery.
About refinery project:
- The Mongol refinery project is the largest project undertaken by the government of India under its Lines of Credit (LoC) programme.
- State-run Engineers India Ltd(SEIL) is the project management consultant for the development of the oil refinery.
- The project is expected to be built by 2022 at an approximate cost of $1.25 billion.
- The capacity of the refinery will be 1.5 million metric tons per annum, with diesel and gasoline as the primary products and liquefied petroleum gas (LPG), fuel oil and jet fuel being produced as secondary products.
Significance of the project:
- Mongolia has its own oil fields producing enough crude for its requirements.
- However,almost all of its crude oil is exported and all of its finished petrochemical products are imported.
- Hence,the refinery project is expected to cut some of Mongolia’s fuel import dependence.
About line of credit:
- The Line of Credit is not a grant but a ‘soft loan’ provided on concessional interest rates to developing countries which has to be repaid by the borrowing government.
- The projects under LOCs are spread over different sectors such as Agriculture, Infrastructure, Telecom, Railway, power among others.