There has been a lot of activity among talking heads in Washington this past week about President Trump taking uranium enrichment off the table for any deal that offers U.S. nuclear energy technologies, e.g., Westinghouse AP1000 reactors, to Saudi Arabia. So, the question is what does Saudi Arabia really want from the U.S or is it willing to go elsewhere for reactors and enrichment capabilities?
If the Saudis walk away from a U.S. nuclear deal, while they might not get enrichment, they most certainly can buy nuclear reactors from China as well as the fuel to run them.
China, as member of the nuclear club, is not interested in seeing a new member. Also, China, as a major buyer of oil and gas from Iran, is not interested in taking actions to put Saudi Arabia on a path to develop a nuclear weapons program. For these reasons, it is unlikely that China would support Saudi Arabia’s desire for an enrichment program. China submitted their bid for the Saudi buisiness in August 2023.
History of Saudi Request for U.S. Reactors
Saudi Arabia’s request for help from the US , first aired in June 2023, aside from uranium enrichment, doesn’t necessarily mean it wants Westinghouse AP1000s. What it may really want, ahead of any decision whether to buy the reactors, are two things. Westinghouse was not invited to bid on the tender for two 1400 MW PWRs released by the Saudi energy ministry.
The WSJ reported in August 2023 “Saudi Arabia Eyes Chinese Bid for Nuclear Plant” what the Saudis really need is U.S. nuclear energy management expertise and PWRs from South Korea, the same kinds of reactors built for the UAE. Neutron Bytes reported in June 2023 this was an emerging Saudi position.
According to the WSJ report, “The Saudi officials said they would prefer to hire South Korea’s Korea Electric Power Corp., or Kepco, to build the plant’s reactors and involve U.S. operational expertise—but without agreeing to the proliferation controls that Washington generally requires.”
First, the Saudi government will want to repeat the UAE strategy of hiring former officials of the U.S. Nuclear Regulatory Commission (NRC) to help it create and manage a Saudi nuclear nuclear safety ministry to insure that the reactors it wants to build are compliant with internationally recognized safety and quality standards and to train the eventual operators of the plant to safely run it without incident. Second, it will want to hire American construction engineering firms to be in an EPC type role for the project though this may not be exclusive to one firm.
Saudi Arabia could be agnostic about buying the Westinghouse reactors from the U.S. so long as it gets technical assistance in nuclear safety regulation and construction management, both of which it lacks in terms of mature domestic capabilities.
It is unlikely that Saudi Arabia will not pursue its plans for a commercial nuclear energy program. The original objective, first announced over a decade ago, and reaffirmed since then, is to use nuclear energy to replace the burning of valuable oil and gas for domestic consumption to free up these resources for export sales.
While the current tender is for two 1400 MWe PWRs, Saudi Arabia’s long term ambitions are for a fleet of 16 plants spread over three sites. That’s a tall order and will require a lot of expertise to be imported to make it happen. The Saudi government may opt for less expensive small modular reactors, especially to power desalination plants and AI related data centers.
Saudi Options for a Commercial Nuclear Energy Program
The lack of access to U.S. expertise to implement a commercial nuclear power program puts the Saudis in a position of needing to seek help for it elsewhere. Options include France, India, and China. Russia is an unlikely choice due to its close alliance with Iran and the fact that it is a major competitor to Saudi Arabia for global market share of the sale of fossil fuels.
Saudi Arabia’s policy level officials have made statements about seeking help for its nuclear energy program from China if the US turns it down. However, if Saudi Arabia pursues even a limited bilateral military assistance program with the U.S., it is very unlikely it would also at the same time buy nuclear reactors, and uranium enrichment technology, from China.
According to the WSJ report for August 2023, in June 2023, Saudi Foreign Minister Prince Faisal bin Farhan played down U.S. concerns about the kingdom’s ties with China, saying it would prefer to have the U.S. as one of the bidders.
While South Korea has been an obvious choice for Saudi nuclear energy needs due to its success building four 1400 MW PWRs in the UAE, the U.S. has leverage to prevent such a deal. This is due to the terms of the 123 Agreement South Korea has with the US which bars it from selling its nuclear reactors / technologies to countries that do not also have 123 Agreements with the US.
The U.S. would have to modify the current 123 Agreement with South Korea which would likely also reopen dialog about South Korea’s long standing requests to authorize its own enrichment program and spent fuel reprocessing.
The Saudi government could make the entire business less complicated by accepting a 123 Agreement that does not include enrichment. For now, the prospect of this outcome seems unlikely given the numerous times over the past few years Saudi leadership figures have promoted the country’s “right to enrichment.”
The reason for this is that the Saudi’s view Iran’s currently unconstrained nuclear program as a key threat. If President Trump hadn’t cancelled the Iran nuclear deal negotiated in 2015 by President Obama, we wouldn’t have this gordian knot of conflicted interests.
India’s Experience Building PHWRs Could Be a Solution
India could be a choice for Saudi Arabia to obtain commercial scale, full size, reactors for Saudi Arabia due to its expertise, domestic heavy industry supply chain, and the experience of skilled trades developed building a fleet of CANDU type reactors which do not need a supply of enriched uranium (U235) to operate. Because CANDU reactors operate without enrichment, the nonproliferation threat of this process is removed from consideration.
The CANDU reactor runs on U238 using heavy water as a moderator. Canada operates its reactors on this method and is the global home of expertise for CANDU reactors. Globally, there are 30 CANDU reactors (22 in Canada), and among the are two in China and one more CANDU in Argentina, but all three of Argentina’s reactors are PHWRs.
Romania recently announced $ 7 billion in financial support for plans to complete twin 700 MW CANDU type reactors. These number show that the CANDU or Pressurized Heavy Waste Reactor (PHWR) is widely accepted as an alternative to other light water reactor designs.
While India does not have a 123 Agreement with the US, its uranium enrichment capabilities are focused on domestic and military uses. However, India’s domestics resources are not sufficient to meet its needs. India imports its uranium from Kazakhstan, Australia, and Canada as well as exploiting domestic deposits. Fuel for its Russian built VVERs is sourced from Russia and the spent fuel is to be returned to that country for reprocessing.
Except for the Russian built and fueled VVERs at Kudankulam, almost all of India’s domestically built reactors are PHWRs. India is building 10 700MW PHWRs with plans for seven more, plus a distributed fleet of 220MW PHWR SMRs for various parts of the nation including India’s extensive network of electrified railroads.
India has extensive trade relations with Saudi Arabia which is one of the largest suppliers of oil to India. It is one of the top seven trading partners with Saudi Arabia and the fifth biggest investor in Saudi Arabia.
All of these factors make India a potential partner for a Saudi nuclear energy program which avoiding the enrichment issues faced by the US as well as making moot any tilt by Saudi Arabia to China for nuclear reactors that would severely complicate plans for a US defense agreement.
How Feasible Politically for the U.S. is the Indian Alternate?
From the perspective of Westinghouse, which was hoping for a big payday from a Saudi nuclear deal until President Trump reversed his position on Saudi plans for enrichment of uranium, a Saudi deal with India is a major competitive threat.
Westinghouse expected that if the Saudi 123 Agreement with the U.S. cleared Congress, which was likely, that it could then enter the bidding to supply the first two nuclear reactors called for in the Saudi tender.
Westinghouse’s expectations may still be that something will be worked out with the Saudi government that would give it the pole position to sell 1,150 MW AP1000s, and eventually, its planned AP300 SMR and eVinci transportable microreactor. This is the “whole pie” outcome. However, there is also a plausible outcome that gives Westinghouse a big slice of pie if not the whole thing.
Given that a Westinghouse deal would produce thousands of American jobs, the prospect of such a development looms large in the eyes of the White House, members of congress from Pennsylvania, and every member of congress from states that are part of the AP1000 supply chain. For instance, Westinghosue has a fuel fabrication plant, one of three globally, in South Carolina.
The “slice of a pie” scenario is that South Korea gets the Saudi order for the 1,400 MW PWRs, and consistent with the settlement of its intellectual property issues with Westinghouse, buys nuclear equipment and fuel from Westinghouse for the Saudi reactors.This scenario produces U.S. jobs, and, especially puts the Westinghouse fuel plant in South Carolina in the picture (fuel for Saudi reactors for the next 60 years) and falls under the paradigm that a piece of a pie is better than no pie at all.
From a geopolitical perspective, it keeps China out of Saudi energy security concerns and in the U.S orbit for all things nuclear, possibly for the rest of the 21st century. The Saudi government was hard over in opposition to signing the Additional Protocol of the Nonproliferation treaty that calls for inspections of all nuclear facilities due to its interest in having an enrichment facility. Absent one, the issue of IAEA inspections ought to be an easier decision for civilian nuclear reactors.
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