Monday, Sep 09, 2013

RIYADH (Zawya Dow Jones)--A joint venture between U.S. and Japanese firms Westinghouse Electric Co., Toshiba Corp. and Exelon Nuclear Partners announced a memorandum of understanding on Monday, joining what already is fierce international competition for the contracts to build the first nuclear power plants for Saudi Arabia.

Saudi Arabia, the world's largest oil exporter, announced in 2011 it would build 16 power plants over the next 20 years, at a cost of more than $80 billion. The push to develop solar and nuclear energy comes in response to soaring domestic electricity consumption that, at its current rate, would make Saudi Arabia an oil importer by 2030, according to projections by Citigroup, by the British think-tank Chatham House, and others.

Saudi Arabia since 2011 has signed nuclear-cooperation agreements with France, South Korea, Argentina, and China, among others, according to the nuclear industry's World Nuclear Organization.

Companies or governments from those countries and from Russia, Britain and Saudi Arabia are among those that have already expressed interest in competing for Saudi's nuclear business, or are expected to. General Electric Co. and Hitachi formed a joint venture in 2010 to pursue nuclear contracts in the kingdom.

U.S. companies vying for Saudi Arabia's nuclear business currently face an extra obstacle - Saudi Arabia and the United States have no formal bilateral agreement for nuclear cooperation. Supporters of Israel and advocates of nuclear nonproliferation are likely to oppose any such agreement, the Nuclear Threat Initiative, a Washington-based advocacy group, notes.

U.S. nuclear industry executives competing for the contracts argue that U.S. involvement in Saudi Arabia's nuclear project would result in plants that are more safely built and ran.

Saudi officials have said they will begin seeking information from potential contractors on the project in early 2014.

Write to Ellen Knickmeyer at ellen.knickmeyer@wsj.com

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09-09-13 1204GMT