Russia, a large supplier
of nuclear-reactor fuel to Europe and Asia, has signed its first purely
commercial contract to supply low-enriched uranium to United States
utilities worth one billion dollars. This was first such deals between
the two countries.
On signing, Russia's nuclear-fuel trade with the US will shift to a
commercial footing, similar to Russia's dealings with other consumers
of fuel, like France and the Netherlands, both old buyers of Russian
uranium.
Techsnabexport (Tenex), the export arm of the Russia's Federal Nuclear
Energy Agency (Rosatom), signed the three US enrichment contracts with
Fuelco LLC - a partnership established in 2003 by Ameren UE, 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.
The three US companies were
named as Luminant, Ameren UE and Pacific Oil and Gas.
"The deal is worth one
billion dollars (700 million euros) and runs from 2014 to 2020,"
Novikov said.
The agreement on the deliveries
followed a deal signed last year by Washington and Moscow which authorised
Russian uranium exports to the US civil nuclear power industry.
For the US, the change is a sign that Washington is acquiesce to the
idea of a major Russian role not only in the international nuclear power
market, but also in the domestic market. Russia's outsize role in supplying
uranium to American utilities had previously been justified because
the fuel was a byproduct of a program to eliminate nuclear weapons.
Now the Russians will be selling nuclear fuel from virgin uranium.
Yet the contract signing, after North Korea's nuclear test recently,
also underscores a counterintuitive element of American nonproliferation
policies. However, by encouraging the commercial availability of Russian
enrichment services, the US deprives other countries of the rationale
to have enrichment programs of their own.
As a legacy of the cold war, Russia possesses about 40 percent of the
world's uranium enrichment capacity, much more than it needs to service
its domestic reactors, and it has sought direct access to the American
utilities market for years.
"We are finally working on the principle of mutual profit,"
Sergei G. Novikov, a spokesman for the Russian state nuclear energy
company, Rosatom, said.
Techsnabexport, the Russian state company that exports low-enriched
uranium, is expected to sign the contract in Moscow with a consortium
of American nuclear companies. Techsnabexport declined to identify its
American partners or the size of the contract.
Russia is already the largest supplier of enriched uranium to American
utilities and provides about half of all uranium consumed in civilian
reactors in the US.
Yet Russia has been prohibited from selling directly to the utilities
by provisions of American law to prevent dumping at below-market prices,
and it was compelled to deal only through a monopoly importer, the United
States Enrichment Corporation.
The company was originally part of the United States Department of Energy,
and the megaton-to-megawatts deal was a government-to-government agreement
wherein Russia and the US sought to agree upon a way of safely disposing
this extraneous uranium. What eventually emerged from this concern was
the 1993 US-Russia Highly Enriched Uranium Agreement, commonly referred
to as "the HEU deal" or the "Megatons to Megawatts".
In a negotiated settlement in February 2008, the US agreed to allow
Russia to sell low-enriched uranium directly to domestic utilities without
the involvement of the enrichment corporation.
Nuclear reactors run on uranium that is composed of 3 to 5 percent uranium
235. In nature, uranium is only 0.7 percent uranium 235.
Uranium used in weapons and in the reactors that power nuclear submarines
use more than 90 percent uranium 235. "Enrichment" means raising
the proportion of 235 compared with the dominant type, 238, and the
Russian industry was set up to provide large volumes of high-enriched
uranium for weapons and marine reactors.
Russia is a major supplier to the developing world by tapping this cold
war-era military industrial base. It has provided 80 tonnes of low-enriched
uranium manufactured into fuel assemblies to Iran for use in that country's
Bushehr reactor, for a price of $46 million, according to Atomstroyexport,
the Russian contractor building the reactor.
Tenex also announced that it had signed a long-term uranium enrichment
contract with Japan's Chubu Electric Power Co. The contracts mark the
first direct supply of enrichment services to the two countries.
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."