Areva's $488 Million Enriched Uranium First Order for UAE Nuclear Plant

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Under the Emirates Energy Corporation's (ENEC) nuclear fuel procurement plan, six international companies in the nuclear fuel supply industry will supply the fuel feed for the four 1,400-megawatt (MW) nuclear reactor units to be built at the ENEC site at Barakah, in the western region of the Emirate of Abu Dhabi. The environmental agency of Abu Dhabi and the federal authority for nuclear regulation have given approval for the construction of the first two units.

The six companies that will commence with supplies in 2014 and 2015 include: ConverDyn (a 50:50 joint venture between General Atomic and Honeywell) (Englewood, Colorado), which will provide conversion services; Uranium One Incorporated (TO:UUV) (Toronto, Canada), which will provide natural uranium; URENCO (Stoke Poges, England), for uranium enrichment services; Rio Tinto (NYSE:RIO) (London, England), to supply natural uranium; Techsnabexport (Moscow, Russia), to supply uranium concentrates, conversion and enrichment services; and Areva S.A. (EPA:CEI) (Paris, France), to provide uranium concentrates, conversion services and enrichment services.

Enriched uranium will be supplied to KEPCO Nuclear Fuels (KNF) (Seongam, South Korea), which will manufacture the fuel assemblies for use in the four units. KNF is a member of ENEC's prime contract consortium, which is led by Korea Electric Power Corporation (KEPCO).

The contracts are forecast to amount to a total of $3 billion. The fuel feed will enable the Barakah plant to generate up to 450 million megawatt-hours (MWh) over a period of 15 years, starting with the first unit in 2017. The other three units are scheduled to come on line in 2018, 2019 and 2020.

In the course of ENEC's supply program, Areva has just signed a $488 million enriched uranium supply contract for the nuclear power units. When complete, the Barakah power complex should meet up to 25% of the United Arab Emirants' (UAE) power requirements, which are forecast to reach 40,000 MW, up from the current 15,500 MW.

The ENEC fuel procurement strategy is guided by the UAE government's support for international non-proliferation initiatives, which was detailed in a nuclear energy policy document released in April 2008. It also included the decision to forgo domestic enrichment and reprocessing of nuclear fuel, and was ratified by federal law in 2009.

ENEC expects to return to the market at various times to take advantage of favorable market conditions and to strengthen its security of supply position. For related information, see March 12, 2012, article - KEPCO on Inside Track for UAE's New Contract for Four Nuclear Power Stations.

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