Oil Report

UPDATE 1-Turkey's EUAS to sign nuclear deal Korea's Kepco

(Adds details, background)

ANKARA, March 10 (Reuters) - Turkish state power company Elektrik Uretim (EUAS) will sign a nuclear energy cooperation agreement with South Korea's Kepco 015760.KS, a Turkish energy ministry source said on Wednesday.

The agreement will cover cooperation with South Korea for a planned nuclear power plant on the Black Sea at Sinop.

Construction of nuclear infrastructure could start in the short-term, said South Korean Deputy Prime Minister Young Hak Kim, speaking at a Turkish-South Korean business conference in Istanbul. He did not elaborate.

Turkey wants to build two nuclear power plants to reduce dependence on foreign energy imports and cover a looming shortfall in electricity for an economy that grew by an average of six percent a year between 2003 and 2008.

Ankara's nuclear plans suffered a setback late last year when a Turkish court annulled a 2008 tender, won by Russia's Atomstroiexport, Inter Rao IRAO.MM and Turkish Park Teknik, citing problems with the pricing of electricity from the proposed plant.

Ankara has been in talks with Moscow since January over a possible intergovernmental agreement that would hand Russian firms the licence to build a separate plant at Mersin on Turkey’s Mediterranean coast.

Numerous Turkish and foreign firms have also expressed an interest in any nuclear tender.

Half of Turkey’s power plants are fired by natural gas, of which Turkey has few reserves, and the country faces a chronic power shortage without annual investment of between $3-5 billion, analysts say.

The government sees atomic power meeting 20 percent of Turkey’s power needs by 2030.

Turkey has cancelled four previous attempts to build a nuclear plant, beginning in the late 1960s, due to the high cost and environmental concerns. (Reporting by Orhan Coskun; Writing by Thomas Grove; Editing by Jon Boyle)