BUENOS AIRES (Dow Jones)–Argentina’s government has agreed to hire Candu Energy Inc. in a $444 million deal to extend the life of the Embalse nuclear power plant, Planning Minister Julio De Vido said at a press conference late Wednesday.
The deal, which also involves Argentina’s nuclear power company, Nucleoelectrica Argentina SA, or NASA, aims to extend Embalse’s life by up to 30 years, De Vido said.
Argentina’s government will invest a total of about $1.3 billion to extend Embalse’s life and increase its output capacity by around 35 megawatts, De Vido said.
The project will be overseen by NASA and most of the component parts used inside the reactor will be produced locally, the government said in a statement.
«The project is already underway and will be completed in a period of five years,» according to the statement.
Embalse has been online since 1984 and operates with a 650-megawatt Candu 6 nuclear reactor. The plant will remain online until November, 2013, when it will go offline for about 20 months during additional work, De Vido said.
The deal with Candu Energy involves the transfer of technology to Argentina, according to the statement.
Candu Energy is a unit of SNC-Lavalin Group Inc. (SNCAF, SNC.T), which recently said it would acquire assets from Atomic Energy of Canada’s, or AECL’s, commercial reactor division.
Argentina has two nuclear power plants–Atucha I, built with Siemens AG (SI, SIE.XE), and Embalse, built with AECL.
The 360MW Atucha I, located on the Parana river in northwestern Buenos Aires province, came online in 1974.
Embalse, located near the city of Cordoba, supplies power to up to four million people in northeastern parts of the country.
A third nuclear plant, Atucha II, is set to come online later this year, more than 24 years later than planned. It will generate 750MW, about 3% of Argentina’s total power output.
The government plans for a fourth plant, which will likely be called Atucha III, to be operational in 2016-2017. The government has identified five possible construction companies that have shown interest in building the plant, which would include two units capable of producing 740MW each.
Planning Ministry officials initially said these companies included AECL; France’s Areva SA (ARVCY, CEI.FR); the Russian State Atomic Energy Corporation; Rosatom; Westinghouse Electric Co., the U.S. unit of Toshiba Corp. (TOSYY, 6502.TO); and China National Nuclear Corp., or CNNC.
Embalse is fueled by non-enriched, natural uranium, according to the Corporacion Andina de Fomento, or CAF, which last year approved a $240 million loan to the Argentine government to help overhaul Embalse.
Source: online.wsj.com