January 22, 2010 / 12:54 PM / 10 years ago

Turkey to forego nuclear tender if Russia deal reached

* Russia, Turkey working out pricing, technology

* Private sector has expressed interested in tender

By Orhan Coskun

ISTANBUL, Jan 22 (Reuters) - Turkey will forego a public tender to build a planned nuclear power plant if Ankara can agree with energy partner Russia on the technical aspects of a deal, government sources said on Friday.

A previous nuclear plan fell through after a court cancelled a 2008 tender, awarded to a consortium of Russia’s Inter RAO (IRAO.MM) and Atomstroiexport and Turkey’s Park Teknik, the tender’s sole bidder.

Turkey said it would press ahead on its nuclear plans, and earlier this month Turkish Energy Minster Taner Yildiz and Russian Deputy Prime Minister Igor Sechin signed a memorandum on building nuclear power plants in Turkey.

“We are currently working on efforts by technical delegations. If these efforts yield an agreement, the nuclear power station will be done without a tender, but we need to see results from the talks,” said one of the two government sources, who declined to be named.

Turkish companies such as Aksa, Sabanci Holding (SAHOL.IS) and Ak Enerji (AKENR.IS) have said they are interested in bidding in a possible second tender. They first saw interest from Turkish, European and North American firms, but none bid, citing conditions for the license.

Turkey’s downstream power demand is expected to rise around 8 percent annually over the next 10 years, and the sector has already attracted foreign investors including Verbund (VERB.VI), Gazprom (GAZP.MM) and CEZ CEZPsp.PR.

Analysts have said Turkey will need to attract investment of up to $5 billion annually over the next five years to build enough capacity to prevent power shortages.

Issues that are still to be worked out between the Russian and Turkish delegations include pricing, one of the points that led to the cancellation of the tender, as well as technology to be used and the time frame for the validity of the licence.

Analysts have raised the issue of a possible connection between a deal on a nuclear power plant and Russia’s help in providing throughput for a planned oil pipeline Turkey plans to build between in its Black and Mediterranean Seas. (Reporting by Orhan Coskun, Writing by Thomas Grove)

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