Oil Report

INTERVIEW-Gulf nuclear plans face big obstacles-IAEA

DUBAI, Jan 27 (Reuters) - Plans for nuclear power stations in the Gulf face a lack of infrastructure that the region’s cash-rich states will take time to overcome, an expert at the United Nations’ nuclear watchdog said on Sunday.

“These countries are among the richer, and you can buy some expertise,” Hans-Holger Rogner, head of planning and economic studies at the International Atomic Energy Agency, told Reuters.

“But you can’t buy everything and you have to take responsibility for your safety -- that you can’t outsource. You need a safety culture, you need an independent regulator, you need the basic engineering skills. They are starting from scratch.”

Gulf Arab states -- among the world’s largest oil and gas producers -- are considering nuclear power as they look to meet escalating domestic electricity demand without burning more fuel and eating into record export revenues.

Analysts say they could quickly buy the technology they need, and push through the planning, financing and licensing much more quickly than would be the case in more democratic countries.

Even so, Rogner said he doubted a nuclear power plant would be up and running in the Gulf before 2020.

Sellers of nuclear technology might be eager for the business, but they would also be reluctant to see their product used without a fully developed industry framework in place, Rogner said.

“Vendors would also be concerned,” said Rogner. “They don’t want their technology to be associated with any of the risks. (Gulf countries) will have to regulate and oversee a plant even if it is operated by an international operator.”

For that you need nuclear engineers. But there are currently no universities in the region that teach nuclear engineering, Rogner said.


The IAEA is working with the Gulf Cooperation Council (GCC), a loose gathering of Arab states, on the basic requirements for nuclear power, Rogner said. It is also working with the individual countries of the GCC.

The economic arguments for nuclear power in the region stack up, he said.

“It is simple. If you can sell the oil for $90 rather than sticking it into your own power plant, you can make a profit that can easily help finance a nuclear power plant.”

When the GCC said in 2006 it was studying developing a joint nuclear energy programme, the announcement raised concern of a regional arms race between the bloc and Iran. The U.S. and other western governments accuse Iran of attempting to develop nuclear weapons, a charge Tehran denies.

Unlike Iran, GCC countries have proposed uranium enrichment be undertaken in a neutral country, limiting some of the potential crossover with a nuclear arms development programme.

For the IAEA, the best way forward for the nuclear industry in the region is with a GCC-wide agreement, rather than for individual countries to go their own way, Rogner said. Such an approach would encourage transparency and mutual trust between the region’s states, he said.

If the countries go ahead on their own, the UAE probably has the edge over the rest of the Gulf Arab states after signing a nuclear cooperation deal with the French government earlier this month, Rogner said.

French companies Total TOTF.PA, Suez LYOE.PA and Areva CEPFi.PA said earlier this month they would join forces to develop plans for two nuclear reactors in the UAE, with a possible start-up date of 2016. (Editing by Quentin Bryar)