Marubeni, Toyo in Mongolia's 1st oil refinary project

Mongolia to rely less on oil product imports from Russia

* Mongolia seeking foreign help to boost oil output, as well (Recasts lead, adds details)

TOKYO, Sept 29 (Reuters) - Marubeni Corp (8002.T) said on Wednesday it has joined a local Mongolian government-backed firm and Japan's Toyo Engineering Corp (6330.T) on a $600 million project to build the first oil refinery in Mongolia.

The refinery, slated to be up and running in autumn 2014 and located in Darkhan city about 200 km north of Ulan Bator, will help the land-locked country reduce its full dependance on imports of oil products from Russia.

Capacity is seen at an estimated 44,000 barrels of crude per day to produce 1 million tonnes of gas oil, 630,000 tonnes of gasoline and 60,000 tonnes of jet fuel, each per year, Japan's No.5 trading firm said on Wednesday.

Marubeni would work with Toyo Engineering to build, maintain and operate the facility, in the project with Mongol Sekiyu Co., headquartered in the capital of Ulan Bator.

Marubeni said it plans to deliver oil to the refinery from Russia's Irkutsk Oil Co, which signed a comprehensive business pact with Marubeni in June on supplies. [ID:nTOE65K01H] Crude supplies will also come from Kazakhstan.

"We're looking to utilise a finance instrument provided by JBIC," a Marubeni spokeswoman said, referring to the government-backed Japan Bank for International Cooperation.

Mongolia, which sits on vast quantities of untapped mineral wealth, currently produces crude oil near the border with China for export to the neighbouring nation via a pipeline.

Mongolia has previously said it was looking for foreign investors to help it boost domestic crude production tenfold in the next three years and build the country's first refinery. [ID:nSGE65E06W] (Reporting by Risa Maeda; Editing by Ed Lane)

Source:Reuters News Service
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