Russia signs fuel supply contract with India

11 February 2009

Russian nuclear fuel producer TVEL and India's Department of Atomic Energy have signed long-term contracts worth more than $700 million for the supply of nuclear fuel to India's nuclear power plants.

Tarapur (NPCIL) 
Russia will provide fuel for the Tarapur plant (Image: NPCIL)
Under the contract, TVEL will supply uranium dioxide pellets to Nuclear Power Corporation of India Ltd (NPCIL). The contract lasts for several years and will ensure fuel supply to the Tarapur plant in Maharashtra state. The plant's two small boiling water reactors have had to operate at only 50% power for many months due to India's previous inability to source uranium in world markets. The change of this situation will give a quick 150 MWe boost to Indian power supplies.
The agreement, TVEL said, marks the first such long-term nuclear fuel supply contract with India after the Nuclear Suppliers Group (NSG) lifted restrictions for supply of uranium, reactors and technologies to India in September 2008. TVEL said that the contract resulted from a series of discussions and negotiations the two sides had in this connection.
Vasily Konstantinov, vice president of TVEL, commented: "All technical details of cooperation had been studied together with the Indian partners very quickly - coordination took not more than three months." He noted India's strategic approach to development of atomic energy including "preparedness to build long-term relations and to sign 'package' contracts, which provide the opportunity to make certain preferences."
In early December 2008, Russia and India signed a civil nuclear cooperation agreement during a visit to India by Russian President Dmitry Medvedev. The signing of the agreement meant that commercial contracts could be prepared by Russian and Indian firms. At that time, the $700 million deal for TVEL to supply fuel had already been agreed.
Besides nuclear fuel supply, a high priority for India is to import a range of large-scale foreign power reactors. Russian firms are already building two large reactors at Kudankulam in Tamil Nadu under a specific cooperation agreement that covers just those two. TVEL is already fabricating and delivering fuel for the first two reactors at the Kudankulam nuclear power plant. The first consignment of fuel from Russia for first unit at Kudankulam was delivered in May 2008. Another two Russian reactors are expected to be agreed for Kudankulam very soon.
S K Jain, chairman and managing director of NPCIL, said that the news contract with TVEL signifies yet another land mark in the relationship between NPCIL and Russian companies in furthering the role of nuclear power as a clean generating technology.
In addition to Russia, other leading nuclear nations such as France, Canada, Kazakhstan, the UK and USA have sent trade missions to India and further nuclear-related contracts, including those for fuel supply, are expected to be signed soon.