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Source: Reuters
The United Arab Emirates denied that it was days away from
awarding the largest ever energy contract in the Middle East for
the development of a nuclear power plant.
The denial was issued after industry sources said that the UAE was
on the verge of naming a winner for the contract to build at least
four reactors, which consultancy Eurasia Group estimates may cost
as much as $US40 billion.
A government official familiar with the negotiations said the UAE
is not days away from awarding this contract. The process is still
ongoing.
The consortium from France, which includes nuclear group Areva, GdF
Suez, and Total, is in pole position to win the contract, sources
familiar with the negotiations said earlier.
"We think we are still well positioned to win it, we have the
nuclear expertise," a source from the French group said.
"The winner will take it all, the bid was for two reactors
originally but then they (UAE) wanted four and maybe six, whoever
wins gets the whole package."
The other bidders include a consortium comprised of General
Electric and Japan's Hitachi, and another of Korea Electric Power
Corporation, Hyundai Engineering and Construction and Samsung
C&T Corporation.
"Emirati leaders have historically valued France's nuclear
experience," the Eurasia Group said. "And a major deal with the
French government would fit within the UAE's diversification plans
in terms of both energy and security."
President Nicolas Sarkozy was in the UAE in May to open a military
base, and some analysts saw the visit as enhancing the French
consortium's prospects of winning the contract.
"Sarkozy's visit was clearly to promote the French bid and this
is a natural process that France always goes through when it comes
to commercial deals," said Christian Koch, director of
international relations at the Gulf Research Center.
"France is already a major partner to UAE in the defence area and I
wouldn't be surprised if they are leading in the bid
now."
Power demand
Record oil revenues have driven an economic boom that has strained
domestic power grids in the UAE, and to keep the export cash coming
in, Abu Dhabi is looking to nuclear energy to help cap fuel burned
for power at home, analysts said.
"Right now the country only burns fossil fuels, bringing in nuclear
energy will help it to free that (gas) up for industrial or for
international exports," said Raja Kiwan of PFC Energy.
"This is part of the leadership's plans to develop a more well
diversified and long-term strategy for energy use throughout the
country."
The UAE anticipates its electricity requirements to rise from 15.5
gigawatts (GW) in 2008 to 40 GW in 2020, the Eurasia Group
said.
The proposed nuclear plant will likely provide about three percent
of the power supply to the market in the UAE by 2020 with the
start-up of about 1 GW of nuclear power, and by 2025 nuclear power
will supply about 15% to the market, consultancy Wood Mackenzie
said.
The UAE's plans have the blessing of the United States. But even
so, atomic development in the emirates could complicate attempts to
halt Iran's nuclear work.
The West suspects Tehran is using its programme to build nuclear
bombs, while Iran insists it needs nuclear energy to meet domestic
generation requirements.
"It will confuse rather than clarify the diplomatic argument with
Iran over its nuclear programs," said Simon Henderson, an analyst
with The Washington Institute for Near East Policy.
"If the UAE has civil nuclear plants, and a Saudi official said in
August that they should have them as well...why can't Iran?"
Nascent nuclear programmes in the UAE and other countries in the
Middle East have fuelled concern of a regional arms race.
The UAE has pledged to buy the fuel it needs for reactors to avoid
enriching uranium, the fuel for nuclear power plants, which if
further refined can be used to make nuclear bombs.
Taking enrichment out of nuclear programmes reduces the possibility
of weapons development.
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