France offers proposals for Saudi Arabia's nuclear energy programme

Saudi Arabia has yet to launch a tender offer process for its planned nuclear reactors aimed at meeting the kingdom's soaring energy demand.

Saudi Arabia has yet to launch a tender offer process for its planned nuclear reactors aimed at meeting the kingdom's soaring energy demand, the French industry minister Arnaud Montebourg said on Sunday.

Mr Montebourg and the chief executives of French utility EDF, and France's Areva as well as the head of French nuclear-research organisation CEA are visiting the Gulf state in a bid to sell French reactors to the kingdom. They have already met with several Saudi officials to discuss their proposal, including the kingdom's oil minister and the head of King Abdullah City of Atomic and Renewable Energy (Ka-Care), which is planning to build 17 gigawatts of nuclear capacity by 2032.

Asked when France is expected to put forward its bid to build nuclear reactors in the kingdom, Mr Montebourg said in Riyadh that the European state has not reached that stage yet. "We expressed a certain number of proposals and it is up to Ka-Care to decide on the methodology they want to use to select the offers ... our proposals addressed the concerns of Saudi Arabia," he said.

The CEA's chairman said that Ka-Care is currently looking at all proposals from French companies and others before it launches its tender. "What Ka-Care is doing now is like a call of interest for potential bidders," he said.

Saudi Arabia hopes to generate 50 per cent of its electricity from nuclear and other renewable energy sources by 2032, Ka-Care's vice president for renewable energy, Khaled Al Sulaiman, said last week in Abu Dhabi. The Arab world's largest economy plans to build a total of 16 nuclear reactors by 2030 at a total cost of around US$100 billion. The plants would take nine to 11 years to complete and the first plant will start operations by 2020, Mr Al Sulaiman said.

A booming population and developing economy are constraining the desert kingdom's ability to provide electricity and water, while keeping domestic demand for oil at bay. Some economists say that if Saudi Arabia's current energy-consumption growth rate of 7 per cent a year continues unabated, the kingdom within 20 years will burn the equivalent of around two-thirds its total current crude production capacity of 12.5 million barrels a day.

The nuclear plans position the kingdom among other Arab states, like the UAE, Egypt and Jordan, seeking to develop nuclear energy for civilian use. The Gulf state has already signed nuclear cooperation pacts with China, France, Argentina and South Korea, and it has also been in discussions with the US, UK, Russia and the Czech Republic over better cooperation in nuclear energy.

* Dow Jones