Doosan’s $350 Million Westinghouse Chinese Contract Spawns High Hopes for Nuclear Exports

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Researched by Industrial Info Resources (Sugar Land, Texas). Doosan Heavy Industries (Seoul, South Korea) has signed a letter of intent for a $350 million contract with Westinghouse Electric Company (Tokyo, Japan) for the supply of two pressure vessels and four steam generators for two AP 1000 nuclear power reactors that Westinghouse will construct in China. Under the agreement the pressure vessels and steam generators will be delivered by 2012.

Westinghouse and its consortium partner The Shaw Group (NYSE:SGR) have a framework agreement with China’s State Nuclear Power Technology Company (SNPTC) to construct four AP 1000 nuclear power plants in China at Sanmen in Zhenjiang province and Haiyang in Shandong. Two sets of pressure vessels and steam generators, out of the four, are expected to be supplied by Chinese companies. Doosan’s contract is expected to be finalized this month, and construction work on the two plants could begin by the end of 2007 with completion set for 2013.

South Korea’s ministry of commerce, industry and energy (Mocie) said that the contract would mark the first time that Doosan Heavy would export key components for nuclear reactors as a package. The contract is seen as a stepping-stone for South Korean companies to expand in the nuclear power market in China and other countries. The Chinese government has announced plans to construct 31 new reactors in the 1,000 MW range by 2020 to meet energy demands with ‘clean’ power. South Korea is aiming for nuclear plant related exports of $350 million in 2007, up from $300 million in 2006.

Speaking of the joint venture Lee Nam-doo, Doosan Heavy’s CEO, said, “With our close partnership with Westinghouse, I believe that this deal will give Doosan an upper hand in more Chinese civilian nuclear projects on the horizon. He then added, “I am hopeful that this will be a golden opportunity for us to expand into the US market through our partnership with Westinghouse.”

Westinghouse, now a group company of Toshiba Corporation, pioneered nuclear power and is a leading supplier of nuclear plant products to utilities worldwide.

The second Nuclear Technology Forum between China and South Korea held in Shanghai in the first week of May could spawn more nuclear exports to China. The forum is jointly sponsored by Mocie and China’s Commission for Science and Technology & Industry for National Defense (Costind). The forum provides the only cooperation channel between the Chinese government and South Korean private nuclear technology companies.

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