NRG Texas nuclear plans seen in doubt after Japan
HOUSTON (Reuters) - NRG Energy Inc's (NRG.N) $10 billion nuclear plant expansion planned for South Texas may never get off the drawing board as repercussions from the nuclear disaster in Japan spread, analysts said on Monday.
"For NRG Energy we think the potential added pressure could be the end of its nuclear loan guarantee award from the Department of Energy for STP (units) 3 and 4 in Texas which could cause a write-off in the short term, but would be likely positive in the long-term," Barclays wrote in a note to clients.
Earlier this month, the company's plan to build and operate two new nuclear reactors at the plant 90 miles southwest of Houston, Texas, cleared a U.S. government environmental hurdle as the company and its partner Toshiba Corp (6502.T) (6502.T) kept working to obtain critical federal loan support.
Tokyo Electric Power Co (9501.T) has also agreed to invest $125 million in the project, but that investment is contingent on DOE loan support.
Analysts at Moody's said the Japanese nuclear problems create "uncertainty" for the NRG expansion project, but abandoning the project would be a positive for the company due to uncertainty over its cost.
The joint venture called Nuclear Innovation North America (NINA) also awarded an engineering and construction contract for the new reactors to a consortium formed by Toshiba America Nuclear Energy Corp and The Shaw Group SHAW.N.
Shares of Shaw plunged nearly 14 percent to $33.16 in afternoon trade on the New York Stock Exchange. NRG shares rose almost 2 percent to $20.18.
NRG declined to speculate about the future of the Texas project, saying the focus for now should be on Japan.
"Right now, our focus is on the safety of the friends and partners we have in Japan," David Knox an NRG spokesman, said. "As far as the impact on the U.S. nuclear industry, there is going to be time for that in the days and weeks to come."
(Reporting by Anna Driver; Editing by David Gregorio)
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