U.S. Seeks Investments With Saudi Arabian Nuclear City (Update1)
2010-12-07 13:29:48.615 GMT
(Updates with economist's comment in eighth paragraph.)
By Glen Carey
Dec. 7 (Bloomberg) -- The U.S. is seeking nuclear-power
opportunities in Saudi Arabia as the world's largest oil
supplier develops alternative energy to meet electricity demand.
U.S. companies are "interested in partnering with the
Saudis in the civil nuclear space," Francisco Sanchez, the
undersecretary for international trade at the U.S. Department of
Commerce, told reporters in Riyadh yesterday. Saudi Arabia is
"making a serious commitment" to alternative energy, he said.
The Arab world's biggest economy announced in April that it
was building the King Abdullah City for Nuclear and Renewable
Energy in Riyadh as economic expansion increases power demand by
8 percent a year. The U.S. government agreed in 2008 to help
Saudi Arabia develop its civil nuclear-power industry.
Sanchez is leading a delegation of executives from
companies including General Electric Co., Shaw Group, First
Solar Inc. and Elkhart Products Corp. as part of President
Obama's efforts to increase exports to Saudi Arabia, according
to a U.S. Commerce Department statement. Sanchez accompanied 11
companies to the kingdom in June.
The U.S. increased its trade with Saudi Arabia by 6 percent
for the first three quarters this year, compared with the same
three quarters in 2009, Sanchez said. U.S. exports to Saudi
Arabia were $10.8 billion in 2009, according to data on the
website of the U.S.-Saudi Arabian Business Council.
Shaw Group, Toshiba Corp. and Exelon Nuclear Partners, a
unit of Exelon Corp., teamed up to pursue nuclear power
contracts in Saudi Arabia. The group wants to provide
engineering, procurement, construction and operations for
nuclear power plants, the companies said in July.
Saudi Arabia, home to about a fifth of global crude oil
reserves, is spending $400 billion over a five-year period,
announced in late 2008, to build infrastructure, expand
alternative-energy production and boost economic growth. Saudi
Arabia also approved a five-year, $384 billion development plan
in August, SPA reported on Aug. 9.
The kingdom is "doing it in large part because it is an
existing, established, cost-competitive technology that enables
large-scale production," Jarmo Kotilaine, chief economist at
NCB Capital in Riyadh, said in response to e-mailed questions.
Saudi Arabia, lacking natural-gas supplies to meet domestic
demand, is burning oil in plants to power its economic growth.
"If they use oil for all of that, they lose revenue that
they could otherwise get by selling it or by using it in a more
productive way than just simply generating electricity,"
Sanchez said. "They seem to be very committed to having civil
nuclear as part of what generates energy for them, and to do it
relatively quickly, like within the next 10 years."
Saudi Arabia is one of several Gulf Arab countries seeking
to develop nuclear energy. The United Arab Emirates awarded a
$20 billion contract in December 2009 to a group of companies
led by Korea Electric Power Corp. to build four nuclear plants,
and Kuwait plans to build four reactors by 2022.
Saudi Arabia announced plans to join the Vienna Convention
on Civil Liability for Nuclear Damage, the official Saudi Press
Agency reported in November.
"They are being transparent in their efforts so they can
show Iran how to conduct themselves publically," Theodore
Karasik, director of research at the Dubai-based Institute for
Near East and Gulf Military Analysis, said in response to e-
Iran says it is producing uranium to fuel atomic reactors.
The U.S. and Europe say Iran is trying to build nuclear weapons.
For Related News and Information:
Top Gulf stories: TOP GULF <GO>
Middle East metal stories: TNI MIDEAST MET <GO>
Middle East economic news: TNI MIDEAST ECO <GO>
Saudi government news: TNI SAUDI GOV <GO>
Global market map: MMAP <GO>
--Editors: Mike Anderson, Stephen Cunningham
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Glen Carey in Riyadh at +966-1-211-8155 or
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