ANALYSIS - UAE could spur regional nuclear power rush

By Simon Webb and Daniel Fineren

DUBAI/LONDON (Reuters) - The United Arab Emirates' huge nuclear power programme could trigger a race among Gulf Arab states for limited atomic energy resources to meet surging electricity demand and free up more oil for export.

The UAE hopes to open the first nuclear reactor in the Gulf Arab countries in 2017 as part of a $40-billion nuclear programme that would compete for engineers and nuclear equipment for decades and set a precedent for cash-rich members of the Gulf Cooperation Council (GCC).

A contract to build reactors is expected to be awarded soon.

"The major impact will be felt if other countries in the region, particularly Saudi Arabia, follow the UAE model and adopt nuclear power," Eurasia Group analysts said in an email.

"We believe this will happen and that the GCC represents a very positive growth market for nuclear power -- if not as big a market as China and India."

Rising concern over climate-warming gases produced from burning oil, gas and coal, combined with volatile fuel prices, has sparked renewed interest in nuclear power across the globe.

The six members of the GCC -- Kuwait, Saudi Arabia, Bahrain, the UAE, Qatar and Oman -- have shown interest in nuclear power to meet soaring domestic demand for electricity and free more oil and gas for export.

But decades of stagnant growth have limited the nuclear energy industry's capacity to meet the resurgent demand for expertise and equipment, so competition between countries with big nuclear ambitions could be fierce.