Hungary-Russia Sign Nuclear Contracts

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - The Hungarian government has signed a series of implementation contracts with Russia's Nizhny Novgorod Engineering Company Atomenergoproekt (NIAEP) (Moscow, Russia) for the construction of two new 1,200-megawatt (MW) nuclear reactors.

The contracts come less than six months after Industrial Info reported that a €10 billion ($13.6 billion) financing package from Russia to build the new reactors had been approved by Hungary's parliament. For additional information, see July 11, 2014, article - Hungary Signs €10 billion Nuclear Deal with Russia.

The deal will greatly increase Hungary's dependence on Russia for energy, which already stands at 80% for oil and natural gas. It also flies in the face of European Union (E.U.) competition rules since no public tender was issued for the expansion project at the Paks nuclear power plant. Paks is Hungary's only nuclear power plant. Located about 100 kilometers (km) south of Budapest, it is home to four VVER-440 type reactors from Russian company AtomEnergoExport , which were commissioned between 1982 and 1987. They have a combined generating a capacity of 2,000 megawatts (MW) and supplied 51% of Hungary's electricity in 2013.

The three contracts for the new reactors -- Unit 5 & 6 - were signed by Sandor Nagy, the CEO of MVM Paks Nuclear Power Plant Ltd, and Vladimir Savushkin, senior vice president and director of NIAEP's Moscow branch. The first contract is the Engineering, Procurement and Construction (EPC) contract for the two new power units, which outlines the tasks for the next 12 years. The other two relate to reactors' maintenance and their fuel supply. NIAEP is part of nuclear major Rosatom (Moscow, Russia), Russia's state-owned nuclear company.

Attila Aszódi, the Hungarian government commissioner, told media: "[These are] exceptionally important contracts that were signed have taken considerable effort during the last five months." With regard to over dependency on Russian energy, he emphasised that the power units will stay under Hungary's ownership. The total cost of the project is expected to be €12.5 billion ($15.6 billion).

Earlier this month, Hungary's National Atomic Energy Office (OAH) granted a 20-year life extension to the Unit 2 reactor at Paks. Unit 1 received a 20-year extension in late 2012. For additional information, see December 4, 2014, article - Hungary Extends Life of Paks Nuclear Plant .

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