US, Japanese enrichment contracts for Russia

27 May 2009

Russia's Techsnabexport (Tenex) has signed long-term uranium enrichment services contracts with three US utilities, as well as with a Japanese utility. The contracts mark the first direct supply of enrichment services to the two countries.
Tenex signed the three US enrichment contracts with Fuelco LLC - a partnership established in 2003 by AmerenUE, Luminant and Pacific Gas & Electric (PG&E) for the procurement of nuclear fuel products and services. The contracts with Tenex are for the direct supply of enriched uranium to the three US utilities between 2014 and 2020. The enriched uranium will be supplied from one or more of the four centrifuge enrichment plants in Russia.
Between them, the partners in Fuelco operate five nuclear power reactors with a combined generating capacity of 5730 MWe.
The contracts - reportedly worth more than $1 billion - are the first to be signed since the conclusion of the Amendment to the Russian Suspension Agreement of February 2008. Under the amended agreement, America will import Russian commercial uranium products from 2011 under new legislation. The new rules will ultimately see an end to measures meant to stop Russia dumping cheap uranium on US markets. The amendment allows Russian companies to sell low-enriched uranium (LEU) to US nuclear generators. Russia will be able to supply limited amounts of nuclear fuel for reactor reloads from 2011, while the supply of initial fuel loads for new reactors would be unlimited. All limits are to be phased out by 2021.

Sergei Novikov, spokesman for Russia's state nuclear agency Rosatom, told the Associated Press, "It is very significant because it begins new relations between Tenex and American companies operating nuclear power plants." He added, "Until this very moment, we did not have direct contracts for enrichment services supplies."
Fuel previously supplied by Russia had been extracted from surplus nuclear weapons and blended down for commercial use, under a deal aimed at keeping Russian nuclear materials off black markets. That agreement, known as Megatons for Megawatts, expires in 2013.
In May 2008, the USA and Russia signed a landmark deal on nuclear cooperation to facilitate trade and allow joint ventures between companies. The deal, known as a 123 agreement after the section of the US Atomic Energy Act that requires it, was signed in Moscow by the US ambassador to Russia, William Burns, and Sergei Kiriyenko, director general of the Rosatom corporation.
Japanese contract
Tenex also announced that it had signed a long-term uranium enrichment contract with Japan's Chubu Electric Power Co.
This is the first contract signed between Russia and Japan since the two countries signed an intergovernmental agreement on the peaceful use of nuclear energy earlier in May.
Tenex said that the contract will enable Chubu to cover part of its enriched uranium services requirements until the early 2020s.

In a statement, Tenex said, "The contract between Tenex and Chubu Electric will benefit both parties. The Japanese company has obtained guarantees of long-term supply of enriched uranium while Tenex will be able to show itself and its products to other Japanese companies."