Energy
From The Report: Mongolia 2015
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Despite abundant resources, Mongolia has struggled to shore up its energy security and decrease its dependence on Russia for refined fuel and electricity. The government has made some headway in diversifying fuel imports and improving its terms of trade, while several mid-stream projects could develop domestic refined fuel production. Meanwhile, important refurbishments of Mongolia’s ageing power infrastructure in 2014 will ensure adequate electricity supplies for the next three years, but new greenfield plants are needed in the long term. New wind farms will provide some respite, but larger coal-fired and hydroelectric plants at various planning stages will be key to balancing fluctuating supply and demand. As Mongolia develops a mix of larger renewables projects and decentralised off-grid systems, it is also seeking to develop its coal value chain to produce both power and coal-based fuels.

This chapter contains interviews with Gérard Mestrallet, CEO, GDF SUEZ; and J. Oyungerel, Chairman, Petrovis.

Articles from this Chapter

Overview

With much undiscovered potential in Mongolia’s energy sector, government laying the groundwork for future development
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Despite abundant resources, Mongolia has struggled to shore up its energy security and decrease its dependence on Russia for refined fuel and electricity. The government has made some headway in diversifying fuel imports and improving its terms of trade, while several mid-stream projects could develop domestic refined fuel production. Meanwhile, important refurbishments of Mongolia’s ageing power infrastructure in 2014 will ensure adequate electricity supplies for the next three years, but new…

Interview

OBG talks to Gérard Mestrallet, CEO, GDF SUEZ
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Interview: Gérard Mestrallet How will the major power projects currently under way impact Mongolia’s energy infrastructure? GERARD MESTRALLET: Along with domestic and international investors, the Mongolian authorities have identified several projects that would help the country to meet its growing energy needs. Multinational corporations are uniquely placed to support these projects with our advanced engineering capabilities and expertise in the development of independent power production…

Interview

J. Oyungerel, Chairman, Petrovis
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Interview: J. Oyungerel How has the economic downturn affected demand for petroleum products? J. OYUNGEREL: Mongolia’s mining sector is heavily dependent on demand from China, especially for coal, which has decreased sharply over the past two years. As a result, the petrol market has seen a substantial reduction in wholesale volumes. That said, this negative trend has been largely offset by a sustained increase in demand on the retail side; hence, Mongolia imported more than 1.15m tonnes of…

Analysis

Increasing electricity capacity key to meeting growing demand in Mongolia’s energy sector
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Despite abundant reserves of fossil fuels and potential renewable energy resources, Mongolia has lagged in developing new power supply to match surging demand. Domestic electricity demand has grown by 30% to 5.5m KWh between 2008 and early 2014, but supply has grown by only 6.8%, with the balance imported from Russia. A key explanation is the long gestation period for privately financed power projects. While successive governments have been committed to the model of independent power plants (IPPs),…

Analysis

Close to home: Local refining capacity is becoming increasingly attractive
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With the lion’s share of current coal exports unprocessed, the government is eager to build a domestic coal value chain that could jump-start Mongolia’s mid-stream segment. By 2014 the government had approved feasibility studies for two coal-to-liquid (CTL) projects and signed a memorandum of understanding (MoU) with Sinopec for synthetic natural gas plants. Looking to Diesel In total, four CTL projects have been tabled since 2008, two of which will aim to produce diesel using the Fischer-Tropsch…

Analysis

The letter of the law: New and updated legislation provides clearer guidelines for investors
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Eager to expand exploration in both traditional hydrocarbons and unconventional fossil fuels like oil shale and coal bed methane (CBM), Mongolia’s parliament overhauled the existing 1991 framework with a new Petroleum Law in July 2014. Significantly easing terms for exploration, the new rules have created much-needed clarity in applying for production-sharing contracts (PSCs) and established competitive fiscal terms. An underexplored frontier play, the hope is that significant new finds in Mongolia…