December 4, 2017 / 7:55 AM / in 11 days

U.S. firms invited to bid for Saudi nuclear plants

RIYADH (Reuters) - Saudi Arabia has invited U.S. firms to take part in developing its civilian nuclear power programme, Energy Minister Khalid al-Falih said on Monday, adding the kingdom was not interested in diverting nuclear technology to military use.

Saudi Arabia's Oil Minister Khalid al-Falih addresses a news conference after an OPEC meeting in Vienna, Austria, November 30, 2017. REUTERS/Heinz-Peter Bader/Files

Reuters has reported that Westinghouse is in talks with other U.S.-based companies to form a consortium for a multi-billion-dollar project to build two reactors and that those firms are pushing Washington to restart talks with Riyadh on a civil nuclear cooperation pact.

Falih said Saudi Arabia was committed to restricting nuclear technology to civilian use.

“Not only are we not interested in any way to diverting nuclear technology to military use, we are very active in non-proliferation by others,” he said at a joint news conference with U.S. Energy Secretary Rick Perry.

KACARE, the King Abdullah City for Atomic and Renewable Energy, is the Saudi government agency tasked with the nuclear plans. It said last month on its website that it was in talks with Toshiba-owned Westinghouse and France’s EDF.

“We hope that the two paths will converge - the commercial, technical discussions between KACARE and the American companies, while we work with our counterparts on the American side to address the regulatory and policy issues,” Falih said.

Perry, who is on his first official visit to Saudi Arabia and will go on to the United Arab Emirates and Qatar this week, said it was “a bit premature” to comment on the negotiations.

“We are in the early stages of it but I think we both are working from the position of getting to yes,” he said.

Washington usually requires a country to sign a peaceful nuclear cooperation pact - known as a 123 agreement - that blocks steps in fuel production with potential bomb-making uses.

In previous talks, Saudi Arabia has refused to sign up to any agreement that would deprive it of the possibility of one day enriching uranium.

The world’s top oil exporter says it wants nuclear power to diversify its energy mix allowing it to export more crude rather than burning it to generate electricity. It has not yet acquired nuclear power or enrichment technology.

Reactors need uranium enriched to around 5 percent purity but the same technology in this process can also be used to enrich the heavy metal to a higher, weapons-grade level. This has been at the heart of Western and regional concerns over the nuclear work of Iran, Saudi Arabia’s arch-rival which enriches uranium domestically.

Riyadh has said it wants to tap its own uranium resources for “self-sufficiency in producing nuclear fuel”.

The kingdom sent a request for information to nuclear reactor suppliers in October, and plans to award the first construction contract in 2018.

Its nuclear plans have gained momentum as part of a reform plan led by Crown Prince Mohammed bin Salman to reduce the economy’s dependence on oil.

Riyadh wants eventually to install up to 17.6 gigawatts of atomic capacity by 2032 - or up to 17 reactors. This is a promising prospect for the struggling global nuclear industry and the United States is expected to face competition from South Korea, Russia, France and China for the initial tender.

Editing by Mark Potter

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