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(2nd LD) S. Korea signs nuclear deal worth potential US$40 bln with UAE

All Headlines 19:40 December 27, 2009

(ATTN: UPDATES with remarks from Cheong Wa Dae official in paras 12-13)
By Byun Duk-kun

ABU DHABI, Dec. 27 (Yonhap) -- South Korea signed a US$20 billion deal with the United Arab Emirates to build four nuclear power plants in the oil-rich country, a deal expected to generate contracts for South Korean companies worth an additional $20 billion for decades to come, South Korea's presidential office said Sunday.

The agreement marks South Korea's first nuclear power plant export deal.

The biggest energy deal contracted ever either by South Korea or UAE was signed by a consortium led by South Korea's state-run Korea Electric Power Corp. and Emirates Nuclear Energy Corp. shortly after a summit between South Korean President Lee Myung-bak and his UAE counterpart Khalifa bin Zayed Al Nahyan here.

Lee arrived in the UAE capital Saturday on a two-day visit that sought to help win the largest nuclear energy deal-ever in the Middle East.

Under the deal, the South Korean-led consortium will build four 1,400-megawatt light water nuclear reactors by 2020 in Sila, some 330 kilometers west of the UAE capital.

The consortium also includes five other South Korean firms -- Hyundai Engineering & Construction., Samsung C&T Corp., Doosan Heavy and Engineering Co., Korea Nuclear Fuel and the Korea Hydro & Nuclear Power Co. -- as well as the U.S. firm Westinghouse Electric Co. and Japan's Toshiba Corp.

The consortium won the UAE order over the French nuclear group Areva SA and a consortium composed of the U.S. firm General Electric Co. and the Japanese firm Hitachi Ltd.

"This contract is expected to lead to additional contracts (for South Korean companies) worth about $20 billion for the operation, maintenance and fuel supply of the reactors during their 60-year lifespan," the presidential office said in a press release.

Cheong Wa Dae spokeswoman Kim Eun-hye earlier noted all additional contracts will be automatically awarded to the South Korean consortium if it is named the main contractor for the construction of the reactors.

"With the signing of the UAE contract, our country finally realizes the dream of becoming an energy-exporting nation, as it exports its nuclear reactors to an oil-exporting country of the Middle East," Cheong Wa Dae said.

The deal may also help the South Korean companies to win additional contracts in the future for more reactors, as the UAE is expected to need far more nuclear power plants due to the fast increase in its demand for electricity, it added.

"This means it will not just end in a one-time deal, but that the country has now secured a stepping stone for its advance into the international market for nuclear power plants," Lee Dong-kwan, top public relations secretary for President Lee, told reporters.

Currently about 430 nuclear reactors are in operation in 31 countries, but the world is estimated to need an additional 1,000 reactors by 2050 while most of its petroleum reserves are expected to dry up within the next 50 years, he added.

Cheong Wa Dae said that in his summit with Khalifa, Lee said that his government will do its utmost to make sure the nuclear power plants will be the best of their kind available anywhere in the world.

"President Lee especially welcomed the deal which was signed just before 2010, when the countries will mark the 30th anniversary of establishing their diplomatic ties. President Lee also proposed the countries work to continue deepening their cooperative relations," it said.

The UAE president agreed to visit South Korea in the near future, as Lee invited him to visit the country next year.


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