International Relations Current Affairs

Mongolia launches construction of its first oil refinery with $1 billion Indian aid

Mongolia has launched construction of its first strategically important oil refinery funded by India in southern Dornogovi province. The ground-breaking ceremony of long-awaited project was attended by Mongolian Prime Minister Khurelsukh Ukhnaa and Indian Minister of Home Affairs Rajnath Singh. 

Key Facts

The refinery will be capable of processing 1.5 million tonnes of crude oil per year. That is about 30,000 barrels per day (bpd). It planned for completion in late 2022. On completion, it will meet all of the nation’s demand for gasoline, diesel, aviation fuel and liquefied petroleum gas (LPG).

The cost of the refinery is estimated at $1.35 billion, and it will include a pipeline and its own power plant. Its financing is part of $1 billion soft credit line agreement between Mongolia and Export-Import Bank of India, made during 2015 official visit by Indian Prime Minister Narendra Modi.

The refinery will process Mongolia’s own crude oil, which is now sold to China. The large landlocked country wedged between giants China and Russia had produced 7.6 million barrels of oil in 2017, about 21,000 bpd, amounting to 6% of its total export earnings.

Significance

The strategically important oil refinery will make Mongolia independent from energy imports and stabilise fuel and commodity prices in its domestic markets. It is expected to boost Mongolia’s gross domestic product (GDP) by 10%. It will end country’s dependence on Russian fuel as it imported almost 1.5 million tonnes of oil products in 2017, virtually all from Russia, thus diversifying its sources of oil products from the current single source. The refinery is expected to increase Magnolia’s crude oil output, helping it to increase its export earnings. The refinery project is also considered as important milestone in bilateral ties between India and Mongolia.

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India, US to hold inaugural 2+2 Dialogue in July 2018 in Washington. DC

The inaugural India, United States 2+2 Dialogue will be held on July 6, 2018 in Washington. DC, capital city of US. The dialogue will focus on strengthening strategic, security, and defence cooperation as both countries jointly confront global challenges. It is seen as a vehicle to elevate the strategic relationship between two countries.

Key Facts

In inaugural 2+2 Dialogue, US Secretary of State Michael R. Pompeo and Secretary of Defense James Mattis will host External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman. Under it, both countries are expected to share perspectives on strengthening their strategic and security ties and exchange views on range of bilateral, regional and global issues of mutual interest.

2+2 Dialogue

The new dialogue format was agreed to between two countries during visit of Prime Minister Narendra Modi to US in June, 2017. It will replace earlier India-US Strategic and Commercial Dialogue. It is similar to India-Japan 2+2 dialogue format between foreign and defence secretaries of the two countries.

The 2+2 Dialogue between US and India aims enhance strategic coordination between both countries and maintaining peace and stability in the Indo-Pacific region. It will put strategic, defence and security relationship between the two countries at the forefront and centre stage.

It will enhance strategic coordination between the two nations and also elevate strategic consultations between both countries. It will insulate India-US strategic relationship from feuds over trade issues and deep divide on economic integration policies as trade and commercial issues were discussed in Strategic and Commercial Dialogue earlier.

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