Tuesday, Jul 31, 2012

(This story was originally published Monday)

By Summer Said

DUBAI--The United Arab Emirates will sign Tuesday a nuclear cooperation and safety agreement with Australia, an official said Monday, after the Gulf state was given the go-ahead earlier this month for construction of two nuclear power units, the first in a string of civilian power plants planned in the strategically sensitive Persian Gulf region.

No supplier of uranium for the reactors has been announced yet. The Emirates Nuclear Energy Corp., or ENEC, which last July opened bids for a "substantial" contract for uranium supply, recently said it was still in talks with several potential suppliers. Tuesday's signing could pave the way for Australia to be a supplier.

"This is a framework cooperation agreement that facilitates transfer of knowledge, technology, equipment and material to the U.A.E.," said Hamad al-Kaabi, the Gulf state's national representative to the International Atomic Energy Agency.

"It would facilitate further cooperation between the nuclear industries of both countries."

Australian Foreign Minister Bob Carr will sign the pact in Abu Dhabi Tuesday evening with U.A.E. Foreign Minister Sheikh Abdullah Zayed Al Nahyan.

Australia, which has the world largest uranium reserves, last March said it would begin talks to sell uranium to the Middle East's second-largest Arab economy for the planned multi-billion dollar nuclear power project in the sheikdom of Abu Dhabi.

The bilateral safeguards agreement with Australia is "a further strict non-proliferation condition that Australia requires for supplying uranium," it said.

The U.A.E., the world's third-largest oil exporter, is facing soaring demand for electricity as its economy expands and hopes that nuclear energy will eventually meet 25% of its power requirements.

Earlier this month, ENEC said it had secured a construction license for two South Korea-designed advanced pressurized water reactors, each capable of producing 1,400 megawatts of electricity. The state company developing nuclear power plants in the U.A.E. has already started construction of the first unit in Barakah, in western Abu Dhabi, and is expected to start building its second reactor next year.

The U.A.E. is investing billions of dollars into developing alternate sources of energy as part of plans to diversify away from hydrocarbons. Its planned nuclear reactors are set to be the first in a string of civilian power plants in the Persian Gulf region, where other regional nations, including Egypt and Saudi Arabia, have also declared in recent years their intent to pursue nuclear energy.

Unlike neighboring Iran, U.A.E. has committed to not enriching uranium itself or to re-process spent fuel.

Mr. Al-Kaabi said that the oil producer hasn't yet finalized a strategy for managing spent fuel from the reactors, but a national waste strategy document is in the advanced stage of discussions.

Write to Summer Said at summer.said@dowjones.com

(END) Dow Jones Newswires

31-07-12 0406GMT