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Areva Wins Deal To Build Two Guangdong Nuclear Reactors

Areva wins deal to build two Guangdong nuclear reactors

€8b contract hailed as the largest in the industry’s history

Al Guo in Beijing
Nov 27, 2007

French state-owned nuclear power giant Areva yesterday sealed the biggest deal in the industry’s history with an €8 billion (HK$92.53 billion) contract to develop two reactors for China Guangdong Nuclear Power Group Corp.

“A new era is opening in nuclear energy partnerships between our two countries,” said Areva chief executive Anne Lauvergeon, a member of French President Nicolas Sarkozy’s delegation to Beijing this week.

Areva and Guangdong Nuclear will build two next generation European pressurised water reactors, EPRs, in Taishan, Guangdong province. The French company will provide the materials and services to operate the reactors.

As part of the deal, Guangdong Nuclear gains access to 35 per cent of the production from Areva’s uranium unit, UraMin. The mainland will be the third country after Finland and France to use EPR technology.

Areva and Toshiba’s US-based Westinghouse Electric unit have been competing to build as many as 30 nuclear reactors in the mainland since Beijing unveiled long-term plans to increase its reliance on nuclear power from less than 2 per cent now to 4 per cent by 2020.

Westinghouse reportedly secured a US$5.3 billion order in July to build four reactors in the mainland.

The new deal Areva signed yesterday has put the French company back in the race for the bulk of mainland contracts.

“China is one of the most important markets and is accelerating its nuclear development,” Ms Lauvergeon said. “So it’s important for us to be part of this competition.”

She said some advanced technology would be transferred to the company’s mainland partners to help them run and maintain the reactors but was reluctant to go into detail about how Areva would protect its proprietary knowledge.

“We are a company that spends a large share of our income on research and development so we have to protect our intellectual property rights,” she said. “At the same time, we’d like to share our expertise with our Chinese partners and someday maybe together we can spread that technology to more international markets.”

Guangdong Nuclear initially planned to build the two reactors in Yangjiang and only this summer decided to move the site to Taishan. Ms Lauvergeon admitted that the decision was made solely by the mainland company.

“It’s a bit late to change the site at this stage and I guess we have to outsource part of our projects to other companies to make sure we can get the job done on schedule,” she said.

She said the two reactors were expected to be installed by 2014, with a generating capacity of 1,600 megawatts each.

In a separate deal, Electricite de France agreed to take a 30 per cent stake in the two reactors Areva will build in Guangdong.

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