Sixth US enrichment contract for Tenex

22 July 2009

Russia's Techsnabexport (Tenex) has signed a long-term contract for the supply of enriched uranium to Constellation Energy, marking the sixth such contract that Tenex has signed with US utilities in the past two months.


The contract with Tenex is for the direct supply of enriched uranium to Constellation between 2015 and 2025. The companies vaguely stated that the enriched uranium would cover "a portion" of Constellation's nuclear fuel requirements over that period, and would be supplied from "one or more" of the four centrifuge enrichment plants in Russia.


More than 60% of Constellation's generating output is from nuclear power plants - its nuclear generation division operates five reactors at three sites (Nine Mile Point and R E Ginna in New York; and Calvert Cliffs in Maryland). Tenex has already signed contracts with Exelon and 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 recent contracts are the first to have been 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, while allowing Russian companies to export 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.


Before the amendment, the only Russian nuclear fuel to enter the USA was produced from deismantled nuclear weapons under a deal aimed at keeping Russian nuclear materials off black markets. That agreement, known as Megatons for Megawatts, expires in 2013 but a new version could be concluded as part of renewed disarmament negotiations.


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.


In addition, Tenex signed a long-term uranium enrichment contract in May with Japan's Chubu Electric Power Co. This was 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.