- By Region
The United Arab Emirates has awarded $3bn worth of contracts to provide, convert and enrich uranium, as the Gulf state pushes ahead with its US-backed plans to develop the Arab world’s first civilian nuclear program.
Abu Dhabi, the oil-rich capital, picked six companies to undertake the fuel supply work including US group ConverDyn, Canada’s Uranium One, the UK’s Urenco and Rio Tinto, Russia’s Tenex and the French energy company Areva, the Emirates Nuclear Energy Corporation said on Wednesday.
The UAE’s plans to develop nuclear energy are progressing at the fastest pace in the Arab world, where governments have long relied on domestic oil and gas reserves to fuel their power plants. Booming regional electricity demand for energy alongside high oil prices has led to many states looking to alternative power sources.
Other countries in the region including Egypt, Jordan and Saudi Arabia are also planning nuclear facilities, though they have yet to make serious progress. Unlike its neighbour Iran, the UAE has gained explicit support from Washington for its nuclear activities.
To gain that trust the UAE government has committed to forgo domestic enrichment and reprocessing of nuclear fuel, relying on foreign sources for its needs.
“It’s a good, balanced move,” said Robin Mills, an energy economist at Dubai-based Manaar Consulting. The contracts include most of the world’s main suppliers of uranium and also hedged against changes in sentiment from the UK or US by including Russia, he said. The choice also served to placate France for losing out on the principal contract, he added.
A South Korea-dominated consortium won the hotly contested contract to build the UAE’s nuclear site, to be located in the Baraka area of Abu Dhabi, towards the Saudi Arabian border. The facility has an estimated cost of $20.4bn and will be managed for a likely further $20bn over 60 years by the consortium led by Korea Electric Power Co.
The contracted fuel supplies would be delivered to South Korea’s Kepco Nuclear Fuels to manufacture the fuel assemblies for the UAE’s four proposed plants, the Abu Dhabi-based nuclear body said.
The announcement to supply fuel is a clear signal that the project is moving ahead despite the Fukushima nuclear crisis in Japan, which increased concerns about the safety of the UAE’s project.
The first unit is scheduled to deliver electricity in 2017, while the remaining three will follow in 2018, 2019 and 2020. The contracted fuel will allow the Baraka plant to generate up to 450m MWh for a period of 15 years, starting from 2017.
Mohamed Al Hammadi, Enec’s chief executive, said: “These contracts will provide Enec with long-term security of supply, high-quality fuel and favourable pricing and commercial terms.”