You're reading: Westinghouse on brink of long-term nuclear fuel deal with Ukraine

The American Westinghouse Electric Co. is on the brink of inking a deal with Ukraine that would not only extend its contract to supply the country’s nuclear reactors with fuel, but increase the number of reactors to which it supplies fuel as well as the frequency of fuel deliveries here through 2020, according to a company official involved in negotiations.

Michael Kirst, Westinghouse vice president of customer relations and sales in the region, told the Kyiv Post on April 4 that the deal between the company and Ukrainian energy operator Energoatom is in its final stages.

“Based on discussions as late as last night (April 3), we will make a deal and increase fuel deliveries this year, and the agreement will be multiple years, going through 2020,” he said. “We are hoping and expecting that this will be tied up by the end of next week.”

The deal, he added, “would solidify Westinghouse as a long-term nuclear fuel supplier to Ukraine.”

It would also strengthen Ukraine’s ties to the West and lessen the country’s dependence on Russia, its long-time monopoly supplier of nuclear fuel. Nearly half of Ukraine’s energy is produced by nuclear power plants, which are operated using mainly Russian fuel.

Under a deal signed in 2008, Westinghouse has been able to supply nuclear fuel to power just the No. 2 and No. 3 reactors at its Yuzhnoukrainsk nuclear power plant, located some 350 kilometers south of Kyiv, though the deal stipulated that the company could provide fuel to three of the country’s 15 reactors over five years. Experts estimated the deal to be worth more than $100 million.

The new deal could be worth more and allow for the company to provide fuel for other reactors, as well, Kirst said.

“We are still discussing how many reactors, and how many reloads (of fuel) annually… will be delivered and to which reactors,” he said.

Energoatom could not immediately be reached by the Kyiv Post to confirm the details of the deal with Westinghouse, a unit of Japan’s Toshiba Corp. But The Wall Street Journal quoted spokesperson Ilona Zayets on April 3 as saying the two sides are in final negotiations on a deal. 

Ukraine’s Energy Minister Yuriy Prodan told the Kyiv Post last week that a deal was in the works following his meetings with representatives of Westinghouse in Brussels and Energoatom in Kyiv in March.

Westinghouse has been negotiating a new contract with Ukraine and Energoatom management since last July, following a scheduled maintenance in 2012 at the Yuzhnoukrainsk nuclear power plant, during which the State Inspectorate for Nuclear Regulation found that the company’s fuel assemblies (cases that support nuclear fuel rods in the reactor) were damaged and unsuitable for use.

In an interview with the Kyiv Post last July, Kirst refuted the inspectorate’s findings, saying that the problems rested with the design of fuel assemblies produced by its Russian competitor, the state-owned nuclear fuel maker TVEL, which are used alongside the American ones in the Yuzhnoukrainsk reactors.

“Russia is doing everything to make it difficult for us (to operate in Ukraine),” Kirst told the Kyiv Post then.

In a written response, TVEL deflected his accusation. “The process of improving the characteristics of Russian nuclear fuel does not align with our desire to somehow complicate someone’s life,” the company said in an email to the Kyiv Post.

READ THE FULL STORY “FUEL DUEL” FROM JULY 4 HERE.       

Last autumn, Westinghouse removed its fuel from the core of the two Yuzhnoukrainsk reactors, examined it, and then loaded it back in, Kirst said, adding that the previous government was working with the company to solve the issue. 

Energoatom had acknowledged that the Westinghouse fuel was adequate then and that Ukraine needed the company to be a long-term supplier of fuel for its reactors, he said.

Prodan said in the past two years cooperation with Westinghouse was effectively sabotaged by the previous government “for some reason.” But now the government made it “an urgent order” to sign this contract. 

Kyiv Post editor Christopher J. Miller can be reached at [email protected], and on Twitter at @ChristopherJM.