December 25, 2009 / 10:46 PM / 10 years ago

South Korea's Lee visits UAE; nuclear deal eyed

SEOUL, Dec 26 (Reuters) - South Korean President Lee Myung-bak visits the United Arab Emirates on Saturday in a push to win one of the world’s biggest nuclear power plant contracts.

The UAE is expected to award the contract estimated to be worth $40 billion to build several nuclear reactors “possibly early next week,” industry sources have said.

A South Korean consortium of Korea Electric Power Corp. (KEPCO) (015760.KS), Hyundai Engineering and Construction (000720.KS), Samsung C&T Corp 000830.KS, and Doosan Heavy Industries (034020.KS) is in the running to win the largest-ever energy deal of the Middle East.

Other bidders include a consortium of General Electric Co (GE.N) and Westinghouse Electric, a subsidiary of Toshiba Corp (6502.T), and a French consortium led by EDF (EDF.PA) and GDF Suez GSZ.PA and including Areva CEPFi.PA and oil group Total (TOTF.PA).

Lee is scheduled to hold a summit meeting with UAE President Sheikh Khalifa bin Zayed al-Nahayan during his two-day visit, the South Korean presidential Blue House said in a statement.

“It remains unclear whether South Korea will win the final contract to build nuclear power plants and President Lee’s visit to the UAE is part of summit diplomacy to win the final ticket in the bidding,” Lee’s office said.

The French consortium was initially seen as a front-runner for the deal but it recently appeared to be losing ground to the Korean. [ID:nGEE5BA1O4]

On the Korea Exchange earlier this week, shares of Korea Power Engineering (052690.KS) and Doosan Heavy Industries (034020.KS) rallied on expectations for the deal, analysts said.

IBK Securities analyst Yoon Jin-il said the contract is expected to be split in three stages with the initial order to be worth about $5 billion, but the first-phase winner is likely to take home the remaining two.

Work is expected to begin in 2012, UAE state news agency WAM said. The UAE is the world’s third-largest oil exporter, but it is planning to build a number of nuclear reactors to meet an expected need for an additional 40,000 megawatts of power.

South Korea’s commerce and energy ministry said on Monday that it would focus on the nuclear power sector in 2010 and step up work on a plan to develop nuclear reactors with indigenous technology, as it outlined next year’s policy objectives. (Reporting by Cho Mee-young and Jack Kim, additional reporting by Amena Bakr in Dubai and Jungyoun Park in Seoul; Editing by Jack Kim and Leslie Adler)

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