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Beijing, Washington Sign Reactors Pact

By ELAINE KURTENBACH
The Associated Press
Sunday, December 17, 2006; 4:56 PM

BEIJING -- China and the United States have signed an agreement that paves the way for Westinghouse Electric Co. to build four civilian nuclear reactors in China, a multibillion dollar coup for U.S. business over French and Russian competitors.

A memorandum of understanding supporting the transfer of nuclear technology to China was signed on Saturday by China's Minister for the National Development and Reform Commission Ma Kai and U.S. Energy Secretary Samuel Bodman.

"This is an exciting day for the U.S. nuclear industry," Bodman said at the ceremony. "It is an example that if we work together we can advance not only our trade relations but also our common goal of energy security."

The agreement capped several days of top-level trade talks between China and the U.S. that otherwise yielded few concrete results. It was signed on the sidelines of a closed-door meeting of five major oil importing nations hosted by China.

Stephen Tritch, Westinghouse's president and chief executive, said the details of the contract to build facilities at Sanmen, in the eastern province of Zhejiang, and at Yangjiang in southern China's Guangdong province have yet to be completed but that it was a multibillion dollar deal. He said the company want the plants up and running by 2013.

The agreement, negotiated late into the night Friday, makes Westinghouse's AP1000 _ which relies on gravity rather than mechanical pumps to carry water to a reactor in an emergency _ China's choice for developing its own nuclear industry.

Westinghouse, U.S. engineering and construction services contractor Shaw Group Inc. _ which holds a 20 percent stake in Westinghouse _ and China's State Nuclear Power Technology Co. signed a companion agreement to follow through with negotiations on specific terms for the technology transfer.

According to a statement issued by the Chinese side, French nuclear group AREVA was their second choice, and a competing bid by Russia's AtomStroyExport was apparently rejected.

Both U.S. and French politicians had lobbied hard for the deal. The Chinese side said it chose Westinghouse based on its technology, its agreement on transferring expertise, the style of cooperation and the prospects for developing locally based technology.

The agreement "pushes mankind into a new level of nuclear technology development," said Ma, China's planning minister. "This project will certainly play a very important role in enhancing the cooperative partnership between China and the U.S."

Bodman said the agreement was reached after a meeting with Chinese Premier Wen Jiabao and President Hu Jintao.

"I think they have superior technology," Bodman said after the agreement was signed. "It will allow production of electricity in an efficient, safe fashion," he said.

The deal in China will create more than 5,000 jobs in the U.S., Bodman said, helping to redress the mammoth U.S. trade deficit which is on line to exceed last year's record $202 billion.

Pittsburgh, Pennsylvania-based Westinghouse, which was acquired earlier this year by Japan's Toshiba Corp., is banking on its AP1000 technology to help lead an atomic-energy renaissance in the U.S. and the rest of the world.

The system, according to Westinghouse, uses much less cable, piping, valves and pumps than the previous generation of reactors, cutting costs and eliminating the need for huge cooling towers, redundant pumps and backup diesel generators.

"There is going to be some benefit on both sides," Tricht said. "As we take this technology forward in China we believe it will also help accelerate the efforts for the United States market as well."

China is building scores of new nuclear power plants, seeking the latest technology from industry leaders while working to shore up its own expertise.

Asia offers the promise of a bonanza for American companies such as Westinghouse and General Electric Co. which already have a strong presence in the region. Westinghouse has helped build 14 nuclear plants in South Korea and provided technology for almost half of Japan's 55 nuclear units. GE, meanwhile, has helped build 36 reactors in Japan, India and Taiwan.

Eighteen reactors _ about 70 percent of the world's total under construction _ are going up in Asia, and another 77 are planned or proposed, according to the Nuclear Energy Institute, an industry advocacy group based in Washington, D.C.


© 2006 The Associated Press