Kuwait to Build Four Nuclear Reactors, Enters Agreements with France and Japan for Nuclear Power

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Researched by Industrial Info Resources (Sugar Land, Texas)--As Middle East countries move toward nuclear power as an alternative source of energy, Kuwait has announced plans to build four nuclear reactors by 2022, with a roadmap for the country's nuclear development expected to be issued as early as January next year.

Ahmad Bishara, the secretary general of the Kuwait National Nuclear Energy Committee, said recently that Kuwait might develop four 1,000-megawatt (MW) nuclear power reactors, and that Kuwait is in discussions with several international partners to determine "how nuclear energy fits in the energy mix of Kuwait for the next 20 years."

Demand for electricity in Kuwait stands at 11,000 MW per year, but this is expected to grow at a rate of about 7% each year, leading to a demand of about 25,000 MW by 2030. The country depends heavily on its oil reserves to generate power, using about 12%, or 300,000 barrels per day, of its daily oil production for electricity production.

If Kuwait exported this oil rather than using it for power generation, it could possibly earn more than $22 million every day, assuming the current benchmark price for crude oil stands at $75 per barrel. Nuclear power generation is seen as a viable option for Kuwait to enable the forecast demand to be met and release oil for export.

Kuwait has agreements in place with both Japan and France for nuclear cooperation. In April this year, French President Nikolas Sarkozy and Sheik Nasser Mohammed al-Ahmad al-Sabah, who is Kuwait's Prime Minister, signed an agreement in Paris to "permit the development of cooperation between France and Kuwait in several areas of nuclear energy."

The agreement was seen as a sign of a comeback for the French nuclear industry, after a consortium consisting of Areva S.A. (EPA:CEI) (Paris, France), oil company Total S.A. (NYSE:TOT) (Paris) and GDF Suez S.A. (EPA:GSZ) (Paris) missed out on a $20 billion contract to build four reactors for the United Arab Emirates (UAE). The contract instead went to a consortium led by the Korea Electric Power Corporation (NYSE:KEP) (KEPCO) (Seoul, South Korea).

However, Kuwait reportedly is considering several options before the plan for nuclear development is issued, which is expected to include a timetable for the issuing of contracts for bids and possible locations for the new plants.

French nuclear power firms such as Areva will not be pleased to note that Kuwait and Japan also signed a nuclear cooperative agreement earlier this month, opening the way for Japanese companies such as Mitsubishi Heavy Industries Limited (TYO:7011) (Tokyo, Japan) and Hitachi Limited (NYSE:HIT) (Tokyo) to gain deals in Kuwait.

Hitachi also entered a bid for the UAE nuclear project as part of a consortium with Westinghouse Electric Company (Monroeville, Pennsylvania), which is a member of the Toshiba Corporation Group (LON:TOS) (Tokyo), and the loss of that contract was a major blow to Japan.

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