U.S. energy chief says to start negotiations on nuclear pact with Riyadh

ADU DHABI (Reuters) - Saudi Arabia is interested in reaching a civilian nuclear cooperation agreement with Washington, the U.S. government’s energy chief said on Wednesday, a step which would allow American companies to participate in the kingdom’s civil nuclear program.

Saudi Arabia has invited U.S. firms to take part in developing the kingdom’s atomic energy program, Energy Minister Khalid al-Falih said on Monday.

U.S. Energy Secretary Rick Perry, who this week visited Saudi Arabia on his first official trip to the region told Reuters that negotiations between the two allies will start soon to tackle the details of the pact - known as a 123 agreement.

“We heard that message that ... ‘we want the United States to be our partner in this’,” Perry said, referring to discussions he had during his meetings with Falih and the top Saudi leadership.

Perry met with Saudi King Salman and Crown Prince Mohammad bin Salman during his trip.

But one potential sticking point could prove to be Riyadh’s ambitions to have the ability of one day enriching uranium - the process for producing fissile material which can have military uses.

Riyadh has said it wants to tap its own uranium resources for “self-sufficiency in producing nuclear fuel” and it was not interested in diverting nuclear technology to military use.

But under Article 123 of the U.S. Atomic Energy Act, a peaceful cooperation agreement is required for the transfer of nuclear materials, technology and equipment.

Washington usually requires a country to sign a pact that blocks it from making nuclear fuel which has potential bomb-making applications.

In previous talks Saudi Arabia has refused to sign up to any agreement that would deprive it of the possibility of one day enriching uranium itself.

Perry declined to comment whether that issue was raised during his visit to Saudi Arabia.

“It is not for me to negotiate the deal but we have agreed to move forward ... We are going to get a negotiating team together going forward and try to hash out any details. But I feel comfortable that progress was made on that front,” he said.

The world’s top oil exporter says it wants nuclear power to diversify its energy supply mix, enabling it to export more crude rather than burning it to generate electricity.

Riyadh sent a request for information to nuclear reactor suppliers in October in a first step towards opening a multi-billion-dollar tender competition for two nuclear power plants, and plans to award the first construction contract in 2018.

Riyadh’s main reason for leaving the door open to enrichment in the future may be political - to ensure the Sunni Muslim kingdom has the same potential to enrich uranium as Shi’ite Muslim Iran, industry sources and analysts say.