UAE Awards Nuclear Fuel Supply Contracts Worth $3bn

The United Arab Emirates awarded $3 billion in contracts to six foreign firms, including global miner Rio Tinto and France’s Areva on Wednesday, to supply fuel for the Gulf Arab state’s first nuclear power plant.

The Barakah plant is slated to open in 2017 and the contracts, which range from the purchase of uranium to conversion and enrichment services, will cover its fuel supply for the first 15 years of operations, the Emirates Nuclear Energy Corp (ENEC) said.

“These contracts will provide ENEC with long-term security of supply, high quality fuel and favorable pricing and commercial terms,” Mohamed al-Hammadi, ENEC’s chief executive, said in a statement.

The other firms are US-based ConverDyn, Canada’s Uranium One, government-controlled nuclear group Urenco and Russia’s Tenex, the world’s largest exporter of low-enriched uranium. The fuel supply programme will begin in 2014-2015.

A spokesman for Areva, the world’s biggest maker of nuclear plants, said its share of the contract was worth 400 million euros ($492.86 million).

In July, the UAE’s nuclear regulator granted ENEC a licence to construct the country’s first two nuclear reactors, to be built by a South Korean-led consortium that will eventually build and operator four 1,400 megawatt reactors in total.

The OPEC member will be the first Gulf Arab state to begin building a nuclear power plant. It wants to save its oil reserves for export rather than using them to generate electricity, for which demand is rising rapidly.

The UAE, and other top oil exporters in the region, have been seeking alternative energy resources to meet soaring electricity demand on the back of a growing population and industrialization that threatens to absorb precious oil and gas reserves.

The contracted fuel will enable the plant, located west of the UAE capital Abu Dhabi, to generate up to 450 million megawatts over the first 15 years, ENEC said.

The company added it “expects to return to the market at various times to take advantage of favorable market conditions and to strengthen its security of supply position.”

The enriched uranium will be supplied to KEPCO Nuclear Fuels – ENEC’s prime contract consortium led by Korea Electric Power Corp – which will make the fuel assemblies for use in the four planned UAE units.

Before granting the contract to the South Korean consortium, the UAE signed an agreement under the US Atomic Energy Act with the United States in early 2009, forfeiting its right to enrich uranium domestically.