UPDATE 4-USEC scraps uranium plant, mulls options

* U.S. government denies request for loan guarantee

* USEC may seek partner or buyer

* DOE says asked USEC to solve technical problems

* Shares plunge 36 percent (Adds DOE comment, updates share price)

By Matt Daily and Michael Erman

NEW YORK, July 28 (Reuters) - USEC Inc (USU.N) said on Tuesday it would scrap plans to build a new uranium enrichment plant and may now seek a partner or buyer after the U.S. Department of Energy denied its request for a loan guarantee, sending its stock plummeting.

USEC's planned American Centrifuge Plant in Piketon, Ohio, was one of four new facilities proposed that would be built to supply enriched uranium to the nuclear power sector, which industry experts believe is poised for a renaissance in the United States.

"We are shocked and disappointed by DOE's decision," USEC Chief Executive John Welch said in a statement. "We deeply regret the impact this decision will have on all those affected, but as we have stated in the past, a DOE loan guarantee was the path forward to completing financing for the project."

The company had so far sunk $1.5 billion into the ACP project, using funds from the equity and debt markets, but still needed another $2 billion.

"If they are ultimately going to extract any value for the ACP, it is going to be through selling USEC, most likely to someone who has deeper pockets, who can either convince the DOE there isn't as much risk with the project or finance it themselves," said Roger Read, an analyst with Natixis Bleichroeder in Houston.

General Electric (GE.N), Toshiba's (6502.T) Westinghouse Electric Co and McDermott International (MDR.N) were all potential buyers, Read said.

None of the companies was immediately available to comment.

DOE SEES TECHNOLOGY PROBLEM

The Energy Department said it had asked USEC to pull its loan request so that the company could do more research to resolve technical problems facing the ACP plant, and that it had offered to fund $45 million of that research over the next 18 months.

The DOE will also expand its environmental clean-up program for Cold War-era contamination at a site in Piketon.

"USEC will have another chance to resubmit their application if they can overcome the technical and financial hurdles, but in the meantime we'll put more people to work in the environmental cleanup effort," Energy Secretary Steven Chu said in a statement.