Tenex is also eyeing other ambitious projects, including new export ports and in the US both a uranium-product storage facility and a potential enrichment facility. On Thursday it is scheduled to open an office in Washington, D.C. to further its commercial relations in the US.
Last fall, Tenex looked like the loser in the high-stakes game of who would control what in Russia’s nuclear emporium. The decision to transfer its enrichment operations to fuel fabricator Tvel, made by state corporation Rosatom, followed an intense debate over the future direction of Russia’s front-end nuclear services (UIW Nov.16’09,p3).
Crucially, however, Tenex maintained its hold on foreign enrichment markets and not only survived the realignment, but moved swiftly to strengthen its brand name and position itself as a major player in US, European and Asian markets. It has concluded 10 long-term EUP supply contracts with eight US nuclear operators since February 2008 when Moscow signed the Amendment to the Russian Suspension Agreement (RSA) with the US government.
The deals are worth $4.3 billion and are staggered throughout the next decade-and-a-half to 2025. However, they represent only 40% of the Russian quota under the Amendment. That means that Tenex (known in Russia as Techsnabexport, a wholly owned subsidiary of Rosatom via JSC Atomenergoprom) has considerable work ahead to fulfill the rest. “We think it’s a decent result considering the comparatively short time frame since signing the amendments to the Suspension Agreement,” Grigoriev told UIW in written responses to questions.
He explained that the “Domenici amendment” and the ongoing discussion with the US Department of Commerce (DOC) on delivery procedures have slowed the contractual process, not to mention the fact that many US operators have no experience dealing with Russian businesses. “Currently Tenex’s work has focused on not only large utilities but on small- and medium-sized companies as well, including those with one or two reactors. This is why we’re putting hopes on opening of a Washington office of Tenam Corp., a 100%-owned subsidiary whose main task will be increasing our client base and developing relations with all American clients,” Grigoriev said.
But given the changing market, particularly post-HEU-LEU in 2013, Tenex is thinking beyond EUP sales. The company has hinted it would like to build a storage facility in the US for its products, and most ambitious of all, even an enrichment plant using Russian centrifuge technology.
According to Grigoriev, the stockpile would be intended to cover force majeure circumstances where timely product delivery to US clients is impeded (the idea arose immediately after the Amendment to the RSA was signed). “The Russian side has repeatedly expressed its interest in realizing this initiative during talks with the Department of Commerce, but due to opposition from several of our competitors the issue is still under consideration at the department,” he wrote. “We hope that common sense will prevail since the creation of a stockpile corresponds to the goals of the US’ energy, and thus national, security.”
As for a US-based enrichment facility, this idea was also mentioned after the signing of the Amendment to the RSA twoand-a-half years ago, and Rosatom Director General Sergei Kiriyenko re-emphasized it earlier this year. “Naturally, the construction of a plant based on Russian technology in the US — which would help us solve chronic restrictions problems we’ve faced in the US market, and boost cooperation to an even higher level — would be on the top of the list,” Grigoriev wrote. He also emphasized that ownership would include local investors, and possibly those from other countries as well.
Nevertheless, the hypothetical possibility of a Russian-controlled enrichment plant in the US raises supply concerns since it would squeeze Russia’s four existing facilities (now owned and operated by fuel fabricator Tvel), which are estimated to account for 40%-45% of world capacity. Grigoriev, however, shrugs this off. “We have already evaluated this risk and concluded that the [supply] substitution will not be critical, and that the aggregate volume of orders for our plants in Russia and abroad will grow. Energy companies always have, and always will [have], diversified suppliers by buying enrichment services from several producers. So there is every reason to think that our traditional clients won’t decline Russian facilities [in favor of a US-based plant],” the Tenex chief said.
Last year the World Nuclear Association’s market report said in its reference forecast that annual world SWU demand — currently nearing 50 million SWU — could increase to 67 million by 2020 and almost 80 million by 2030. However, in a more dynamic scenario, long-term demand could double and reach over 100 million SWU in 20 years, the WNA said. In the shortterm, Grigoriev admits that there will be a surplus of SWU capacity — indeed, such a surplus exists today, he says — though the exact amount of future overcapacity is indefinable given a range of factors (price of uranium, new reactor development, new competing enrichment capacity coming online).
“Some surplus output capacity is not bad in and of itself. There should always be a bit of reserve for unforeseen circumstances,” Grigoriev said. “So the question is not necessarily in overcapacity per se, but in whose overcapacity. Today it’s the gaseous diffusion capacities of Usec and Areva, both of which are underutilized. Tomorrow it could be those whose costs per SWU unit are higher. That’s what we need to be thinking about.”
Factoring in the above-mentioned forecast, and the enormous outlays and lead-time for building enrichment plants, Grigoriev emphasizes there is no time to waste. “A much greater risk arises when a company fails to react to changing market conditions, to delay the development and use of new marketing tools. A foreign centrifuge plant based on Russian technology could be one such tool, though not the only one by far,” he said, adding that Tenex’s long-term goal is to preserve a 25% share of the world SWU market (Tenex’s market share is currently 40%, including LEU supplies within HEU-LEU). “But given the very tough competition on the world market, it is not going to be easy achieving this,” he said.
Tenex already has a foothold in Asia, where demand growth appears highest. The company is the lead Russian contractor to build the last of four enrichment facilities with a total 1.5 million SWU in China. In Japan, which has the world’s thirdlargest reactor fleet, Tenex is working within the framework of a memorandum of understanding signed with Toshiba in March 2009. Media reports have indicated Russia’s interest in building an enrichment facility in Japan, but Grigoriev stopped short of specifics. “Work on a number of potential projects is continuing, but at the moment we are not ready to announce any specific results,” he said.
With exports expected to grow, ensuring timeliness and safety of deliveries will be a major challenge for Tenex, which is why in the past year it has placed particular emphasis on logistics operations. Currently all EUP exports and imports are handled by Izotop, a St. Petersburg-based terminal over which Tenex acquired complete control this summer. However, handling uranium products in a city of over 5 million people is foolhardy, and Grigoriev says that the company is working hard to transfer operations to Ust-Luga, a new multifunctional port on the Gulf of Finland near the Estonian border. He said public debates have been held (a legal requirement in Russia) and an environment assessment carried out, and local authorities have given permission to build storage facilities for EUP.
Tenex is also actively seeking an East Asian port from which it can export EUP, most crucially to Japan. (Previously the port in Vladivostok was licensed to handle EUP, though it no longer is.) “So far no decisions have been made on when a storage facility might be built, and which port would be used. Talks are continuing with both local authorities and businesses,” Grigoriev said, and stressed the project’s importance. “In our opinion, the realization of a transportation-logistics center in the Far East will give additional stimulus to our existing, and, most importantly, future contracts in the Asian-Pacific region[.] ... It’s important to note that the project has received the backing from Japanese government and commercial organizations.”
27 Ноября 2024 | среда | 22:31
