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SEOUL/PARIS (Reuters) - State-run Korea Hydro and Nuclear Power Co. (KHNP) has signed a long-term uranium enrichment service deal with French state-owned nuclear power group Areva worth over 1 billion euros ($1.34 billion).
Under the deal, KHNP will take the service for over 10 years, the South Korean power group said on Tuesday.
In a separate statement, Areva said the contract was worth more than 1 billion euros and that it would secure orders for its future Georges Besse II enrichment plant, which will be located in Pierrelatte, in southern France.
The service is vital for South Korea as more than 90 percent of the uranium it uses annually must go through the enrichment process to be suitable for the light water reactors that make up the bulk of South Korea's nuclear plants.
Nearly 40 percent of energy generated domestically comes from nuclear power plants, the largest single source of power in South Korea.
KHNP said the cost for uranium enrichment services has been rising, with more countries keen on building nuclear power generators as they are relatively cheaper than fossil fuel generators to operate.
The service can be commercially operated by only four countries -- the United States, Britain, France and Russia.
Additional reporting by Dominique Vidalon in Paris