(EnergyAsia, October 29 2010, Friday) — Japan’s Marubeni Corporation and Toyo Engineering Corporation have signed an agreement with Mongol Sekiyu Corporation to look into jointly constructing a US$600 million oil refinery in the Mongolian city of Darkhan, about 200 km north of the capital city of Ulaanbaatar.

Marubeni said the 44,000 b/d refinery will have the capacity to produce one million tons of diesel fuel, 630,000 tons of gasoline and 60,000 of jet fuel a year.

Marubeni and Toyo Engineering would be in charge of engineering, procurement, construction, maintenance and operation of the refinery, with is expected to start up in late 2014.

Marubeni said it has signed an agreement with the Irkutsk Oil Company in June 2010 to purchase crude oil from the Irkutsk field as a possible feedstock for the refinery.

Mongolia is completely reliant on fuel imports from Russia to develop its economy and its vast reserves of natural resources such as coal, copper and uranium.

Marubeni said: “The construction of this refinery, the first in Mongolia, would go a long way toward eliminating its dependence on foreign oil product imports, and as such is a very important project for the country.”