Saudi plans to invite bids for nuclear power project in 2020 - sources

KEPCO Engineering & Construction Co

04/04/2019 14:07

* Saudi wants to diversify its power generation mix
    * Washington scrutinises plans over possible military uses
    * Riyadh talking to suppliers from five countries

    By Sylvia Westall, Rania El Gamal and Stephen Kalin
    DUBAI/RIYADH, April 4 (Reuters) - Saudi Arabia plans to
issue a multi-billion-dollar tender in 2020 to construct its
first two nuclear power reactors and is discussing the project
with U.S. and other potential suppliers, three sources familiar
with the plans said.
    The world's top oil exporter wants to diversify its energy
mix, adding nuclear power so it can free up more crude for
export. But the plans are facing Washington's scrutiny because
of potential military uses for the technology.
    Saudi Arabia, which aims to mine for uranium, says its plans
are peaceful. But Crown Prince Mohammed bin Salman said in 2018
the kingdom would develop nuclear arms if Iran did.  urn:newsml:reuters.com:*:nL8N1QX4BN
    U.S., Russian, South Korean, Chinese and French firms are in
talks with Riyadh to supply reactors, a promising deal for an
industry recovering from the 2011 Fukushima nuclear disaster.
    "Saudi Arabia is continuing to make very deliberate steps
forward although at a slower pace than originally expected," one
of the sources familiar with the plans told Reuters.
    Saudi officials previously said they aimed to select a
vendor in late 2018, which then slipped to 2019. The sources
said the tender would now be issued in 2020.
    Two sources said the project was proceeding slowly partly
because the kingdom was still in discussions with all potential
suppliers rather than narrowing them down to a short list.
    The plans have also been delayed by strained ties with
Washington, which criticised Riyadh after the murder of Saudi
journalist Jamal Khashoggi in the kingdom's Istanbul consulate
in October, a source familiar with the talks said.
    Riyadh needs to sign an accord on the peaceful use of
nuclear technology with Washington to secure the transfer of
U.S. nuclear equipment and expertise, under the U.S. Atomic
Energy Act. U.S. Energy Secretary Rick Perry said last week that
the negotiations which began in 2012 were continuing.
    The source said Washington has also been seeking to convince
Riyadh to sign the International Atomic Energy Agency's
Additional Protocol on extra safeguards for verifying nuclear
technology is used for peaceful applications. The kingdom has so
far resisted, the source added.
    The fate of these negotiations could determine whether
Riyadh reaches a deal with U.S. firms, the source said.
    
    WORKSHOPS
    Saudi Arabia, which sent a "request for information" (RFI)
to nuclear vendors in 2017, is holding workshops with vendors
from five nations as part of the pre-tender process, one source
said, adding that this was expected to last 12 to 15 months.
    The King Abdullah City for Atomic and Renewable Energy
(KACARE), tasked with developing the nuclear programme, has
brought in an executive from oil giant Saudi Aramco to help
manage the pre-tender consultancy process, two sources said.
    The Energy Ministry, overseeing the project, and the
kingdom's international press office did not respond to Reuters
requests for comment.
    KACARE has in the past said the kingdom was considering
building 17.6 gigawatts of nuclear capacity by 2032, requiring
about 16 reactors. But the sources said the focus for now was on
the first two reactors and a potentially smaller programme.
    Neighbouring United Arab Emirates is building a nuclear
power plant, the first in a Gulf Arab state. Iran, across the
Gulf, has a nuclear plant in operation and has been locked in a
row over its nuclear ambitions with the United States.
    Saudi Arabia, which has long vied with Iran for regional
influence, has said it will not sign any deal with the United
States that deprives the kingdom of the possibility of enriching
uranium or reprocessing spent fuel in the future, both potential
paths to a bomb.
    South Korea's state-owned Korea Electric Power Corp (KEPCO),
Russian state nuclear group Rosatom, French utility EDF
 EDF.PA , state-run China National Nuclear Corp and U.S.
Westinghouse have expressed interest in the Saudi project.
    

 (Additional reporting by Geert De Clercq in Paris
Writing by Sylvia Westall
Editing by Edmund Blair)
 ((sylvia.westall@thomsonreuters.com; Dubai Newsroom +971 4453
6488; Reuters Messaging:
sylvia.westall.thomsonreuters.com@reuters.net))