UPDATE 1-India L&T to partner Toshiba unit for nuclear power

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MUMBAI, Jan 16 (Reuters) - India's top construction and engineering firm Larsen & Toubro (LART.BO) said on Friday it would partner a unit of Japan's Toshiba (6502.T) to build nuclear reactors, hoping to tap Indian orders for power projects.

The two companies plan to build 1,000 megawatt reactors in India but other terms of the partnership were yet to be finalised, M.V. Kotwal, director and head of L&T's heavy engineering business told reporters.

"This is just a first step, the government is yet to make official announcement for the size of reactors and modus operandi in giving these orders," Kotwal said at a news conference.

India signed a civilian nuclear co-operation agreement with the United States late last year and global nuclear power firms are keen to partner Indian firms expecting large orders from the power deficient nation.

Reactors worth 600-800 billion rupees ($12.3 billion-$16.4 billion) could be ordered by 2020, Kotwal said, driven by demand for power in Asia's third-largest economy, which suffers from a peak hour power deficit of 16 percent.

Private firms are currently allowed to participate in the nuclear power sector only as a minority partner with state-run Nuclear Power Corp.

Toshiba's Westinghouse Electric Co unit will supply its AP 1000 light water reactors, which are in use in the United States and China, the two firms said in a joint statement.

"We are looking to partner with other firms to localise supplies for cost and speed of operations in India," said Meena Mutyala, country head of Westinghouse.

Diversified L&T, which has been riding a building boom in India over then past few years, has seen growth slow in the last few months tracking a faltering economy hit by the global financial crisis and tight liquidity at home.

The company will report its December quarter earnings later this month.

L&T shares ended 1.8 percent higher at 717.60 rupees in a Mumbai market .BSESN that rose 3.06 percent. ($1=48.8 rupees) (Reporting by Prashant Mehra, Editing by Mark Williams)