MOSCOW, March 7 (RIA Novosti) - A group of Russian and Czech banks have signed an agreement to finance the construction of Mongolia's first oil refinery, the banks said in a joint statement Tuesday.

Gazprombank, a subsidiary of Russian natural gas giant Gazprom; the government-owned foreign trade bank, Vnesheconombank (VEB); and Czech Export Bank a.s. agreed to finance the $600 million project. The first stage is estimated at $350 million, a statement from Gazprombank and Czech Export Bank said.

The banks will finance construction on a syndicate basis. Czech Export Bank will provide 50% of the funds, while VEB and Gazprombank will finance the Russian part of the project.

Mongolia's first oil refinery is designed to refine 1.5 million metric tons of crude per annum (30,000 bbd). Equipment will be supplied from Russia and the Czech Republic.

The oil refinery will process crude for Mongolia's internal needs and export surplus amounts to the northern provinces of energy-hungry China.