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Ukraine to sign deals with US to gain nuclear independence

Kiev will sign deals with US firms on March 30 on supplies of nuclear fuel, and on equipment deliveries paving the way for Ukraine’s own enrichment capability, the energy minister said on Wednesday.

Ukraine, which relies almost entirely on Russia for its nuclear fuel imports, has stepped up efforts in recent years to diversify supplies amid rising prices and energy disputes with Russia. Yuriy Prodan told a Cabinet meeting that contracts would be signed with Westinghouse Electric Company on nuclear fuel supplies from 2010, and with Holtec International for deliveries of equipment for nuclear fuel production. The deal with Holtec comes despite concerns in Washington over Ukraine’s plans to develop nuclear fuel production technology, which could potentially be diverted to weapons programs. Although there is little likelihood of Ukraine seeking nuclear weapons, the US and other countries are wary of allowing states to set an awkward precedent by launching uranium enrichment. Ukraine, which generates almost half its electricity from four nuclear plants with a total of 15 reactors, buys almost all its nuclear fuel from Russia’s TVEL Corporation.

The strong level of energy dependence on Russia, which also has almost total control over Ukraine’s natural gas supply, prompted President Viktor Yushchenko to announce plans in January 2006 to create nuclear fuel production facilities. The decision was sparked by a fuel price hike by TVEL in late 2005, and a natural gas debt row with Russia’s state gas giant Gazprom at New Year 2006, during which Russia turned the taps off to Ukraine. Kiev’s drive to diversify nuclear fuel imports had begun several years earlier. In 2005 the South Ukraine plant began using fuel supplied by Westinghouse, which is now owned by Japan’s Toshiba, in line with a 2000 contract. State nuclear company UkrAtomProm, formed last year, is expected to oversee the design and construction of a nuclear fuel production facility in Ukraine. (