TURKEY REJECTS US OFFER TO EXCHANGE HIGH-ENRICHED

UNCLAS SECTION 01 OF 05 ANKARA 004722

SIPDIS

STATE FOR EUR/SE AND NP/NE

E.O. 12958: N/A
TAGS: ENRG KNNP TRGY TU
SUBJECT: TURKEY REJECTS US OFFER TO EXCHANGE HIGH-ENRICHED
FOR LOW-ENRICHED URANIUM

REF: ANKARA 775


1. Summary: A DOE team, accompanied by the Commercial Manager
for the French energy company CERCA, visited Ankara from July
10-13 to discuss with Turkish Atomic Energy Commission (TAEK)
officials Turkey's participation in the Foreign Research
Reactor (FRR) Spent Nuclear Fuel (SNF) Acceptance Program.
DOE Reps. outlined the offer to exchange spent
highly-enriched uranium (HEU) rods for low-enriched uranium
(LEU) rods procured by the USG from CERCA for Turkey. TAEK
President Cakiroglu pledged Turkey's desire to work with the
US on the FRR/SNF project but expressed concern about the
number of LEU rods offered and questioned whether Turkey's
DOE Y-12 energy credits could be converted into additional
LEU rods. DOE and Embassy reps. explained that the LEU
offered exceeded the HEU to be swapped and, while agreeing to
take Cakiroglu's question under advisement, made clear it
could not be linked to this time-sensitive offer which
required approval by July 18 to secure Turkish HEU pick up by
a ship scheduled to traverse the eastern Mediterranean in
October, 2005. Cakiroglu deferred to Energy Minister Guler
for a final decision. On July 18, Cakiroglu informally
advised Embassy that Turkey would not/not participate in the
October shipment. Formal notification is pending. He also
inquired about the status of the ratification of the Peaceful
Uses of Nuclear Energy Agreement that the U.S. and Turkey
signed in 2000. A DOE summary report of the discussions is at
para. 9. End Summary.


2. Charles Messick of DOE Savannah River Site, Dr. Jim Matos
of Argonne National Laboratory, CERCA Commercial Manager
Helios Nadal, and Deputy PolMilCouns met on July 11 with TAEK
President Okay Cakiroglu, Vice President Erdener Birol, and
Vice President Ali Alat to discuss the exchange of 8 new LEU
rods for 30 spent HEU rods at Turkey's Cekmece Research
Reactor. Messick emphasized the urgency of an immediate
decision and laid out the mechanics of the proposed Oct. 1
pick-up of Turkey's HEU, including DOE's request that Turkey
transport the HEU rods to a Mediterranean port to save
shipping time and costs. He emphasized that, based on the
low level of unused U-235 contained in Turkey's HEU rods, the
offer of 8 LEU rods was generous, with the actual equivalent
closer to 6 rods. The remaining U-235 in Turkey's HEU rods
would be used up soon and the 8 additional LEU rods would
provide Turkey with a fresh core to last for years. CERCA
Manager Nadal said the fresh LEU could be deliver to Turkey
by April 2006 if Turkey immediately agreed to the exchange.
He laid out the dollar value of the fresh LEU units Turkey
would receive.


3. TAEK President Cakiroglu disputed the remaining life in
Turkey's HEU rods, suggesting they would be usable for three
more years. He dismissed HEU disposal concerns, joking that
Turkey intended to enter the spent fuel storage market within
10-20 years to compete with western countries. He balked at
the projected April LEU delivery date, saying Turkey expected
to receive the fresh LEU before shipping its spent HEU.


4. Cakiroglu continued that TAEK did not want to use its 16
existing LEU rods to keep the existing reactor operating
until the fresh LEU arrived in April. Those rods were
designated for use in the core of a new reactor that should
come on line within 3.5 years as part of a program that
included upgrading the existing reactor. Cakiroglu added that
Turkey was ready to cash in a 1984 DOE Y-12 credit for 21
kilograms of LEU (note: the actual credit is for 4.7 kgs of
HEU which converts to about 21 kgs of LEU) still on the books
and convert that into completed LEU fuel assemblies to
supplement 8 LEU on offer to support this project. According
to Cakiroglu, TAEK hoped to start talks with Westinghouse and
a French firm regarding construction of the new reactor. Ten
construction sites had been evaluated but TAEK required
preliminary design parameters from potential site builders to
make the final decision. TAEK's current plan calls for
negotiations with the companies to begin in Fall 2006 and
builder selection in early 2007.


5. Turning to the DOE request for Turkey to ship overland the
spent HEU rods to a Mediterranean port, Cakiroglu demurred,
saying Turkish transport regulations were very stringent and,
given the large number of Aegean ports, Turkey did not want
to undertake the costs and security risks associated with
such a movement. Messick responded that DOE would work with
Turkey to identify the best port, but requested that Turkey
consider ports that would reduce shipping time. The ship
would arrive in the United States in mid-November.


6. Deputy PolMilCouns explained that the current HEU/LEU
exchange could not be linked to liquidation of Turkey's Y-12
credit. The HEU/LEU exchange was a one-time offer based on
current DOE funding and the scheduled shipment of HEU from
other countries through the eastern Mediterranean. There
might not be another ship in the region for months or years
and a second offer would be contingent on DOE funding
priorities at that time. She underscored that Turkey could
not be guaranteed an equivalent offer and urged a decision on
the merits of this exchange alone. In response to Messick's
statement that conversion of Turkey's Y-12 credits would be
contingent on US ratification of the Peaceful Uses of Nuclear
Energy Agreement, Cakiroglu suggested that a work-around,
such as the one identified for the current HEU/LEU swap
proposal, could be identified. Deputy PolMilCouns said that
issues related to the nuclear energy agreement were being
worked in Washington and offered to take back Turkey's
request to Washington for consideration.


7. Cakiroglu deferred decision on the exchange to Minister
of Energy Hilmi Guler, and said it would take time to get the
Minister's input but agreed that CERCA could submit a draft
contract to TAEK for initial review. Messick emphasized that
the July 18 deadline was firm and urged Cakiroglu to conduct
the necessary reviews immediately. On July 18, Cakiroglu
notified Deputy PolMilCouns that the MFA will formally notify
the Embassy that Turkey has decided to "wait for the next
shipment." She reiterated that Turkey may have to wait
months or even years for the next ship to pass by Turkey and
suggested that any future offer was unlikely to match the
offer on the table. Cakiroglu responded that, while Turkey
wanted to assist the USG, it was happy to continue using its
HEU until that time came. Comment: Post has not received
MFA notification of Turkey's rejection of this offer, which
may be a result of MFA summer rotations and vacations, which
have significantly thinned its ranks in the short term. End
Comment.


8. Cakiroglu explained that Turkey wants to cash in its Y-12
credits to increase the number of LEU units Turkey would
receive in exchange for its HEU. He lamented the lack of USG
ratification of the Peaceful Uses of Nuclear Energy Agreement
and looked forward to its ratification in order to facilitate
Turkey's compensation for the Y-12 credits. He added that
TAEK had been investigating the chain of events leading to
Turkey's agreement to deliver HEU to the USG in 1984 and said
some documentation suggested that Turkey's credit was with
Westinghouse, and not the USG. If that proved to be the
case, he queried whether agreement ratification was necessary
for Turkey to be compensated. Deputy PolMilCouns offered to
investigate the issue further but suggested it was unlikely
that the credits were with private industry.


9. Following is the text of the DOE Trip Report prepared by
DOE Savannah River Site Manager Chuck Messick:

Begin Text of Report:

Turkish Atomic Energy Authority (TAEK)
Ankara, Turkey
Regarding the TR-2 Research Reactor at Cekmece Nuclear
Research and Training Center (CNAEM)

July 10 - 13, 2005
VISITING TEAM

Mr. Charles Messick, Department of Energy-Savannah River
Operations Office
(charles.messick@srs.gov); 803-725-9494; 803-725-8856
(fax)
Dr. Jim Matos, Argonne National Laboratory

KEY PERSONNEL IN TURKEY

Mr. Okay CAKIROGLU, President TAEK
Tel: 90-312-287-5723
Fax: 90-312-287-8761
Email: okay@taek.gov.tr

Dr. Erdener BIROL, Vice President TAEK
Tel: 90-312-287-6536
Fax: 90-312-287-8761
Email: erdener.birol@taek.gov.tr

Mr. Ali ALAT, Vice President TAEK
Tel: 90-312-284-0264
Fax: 90-312-287-8761
Email: ali.alat@taek.gov.tr

KEY EMBASSY PERSONNEL

Mr. Kevin Lyon, EXBS Advisor
Political/Military Section
Tel: 90-312-455-5555 ext. 2525
Fax: 90-312-468-4775
Email: LyonK@state.gov

Ms. Maggie Nardi, Deputy Counselor for Political-Military
Affairs, participated in the meeting for Mr. Lyon.
NardiMH@state.gov

OTHER KEY PERSONNEL

Mr. Helios Nadal, Commercial Manager for CERCA
Tel: 33-(0)1-47-96 58 86
Fax: 33-(0)1-47 96 58 92
Email: helios.nadal@framatome-anp.com

PURPOSE OF THE VISIT

To discuss U. S. nuclear weapons nonproliferation policy and
program issues concerning TAEK,s participation in the
Foreign Research Reactor (FRR) Spent Nuclear Fuel (SNF)
Acceptance Program near-term shipment involving the TR-2
Research Reactor. Immediate consideration and determination
is required if TAEK will participate in this shipment.

INTRODUCTION

The Turkish Atomic Energy Commission was founded in 1956 as a
first step in the recognition of peaceful uses of nuclear
energy in Turkey. The first task of this Commission was the
establishment of the ekmece Nuclear Research and Training
Center (CNAEM) in 1962 in Istanbul. The first Turkish
Research Reactor, TR-1 (1 MW),was also installed and
operated in the same year at CNAEM. TR-1 was operated
continuously for fifteen years from May 27, 1962 to September
13, 1977. The 32 fuel assemblies from TR-1 were sent to
Idaho in 1984. The TR-1 reactor was functionally replaced by
the 5 MW TR-2 reactor in 1982 to meet the increasing demand
for radioisotopes. The TR-1 reactor components still exist
at CNAEM.

At the time of this visit, the reactor is operated briefly
approximately once per week, if at all. TAEK indicated they
have plans to increase power from 5 MW to 10 MW in the
future. Currently, 18 HEU fuel assemblies and three LEU fuel
assemblies are in the core.

FUEL INVENTORY

The TR-2 fuel assemblies are MTR type assemblies.
Characteristics of TR-2 fuel and control assemblies that may
be returned to the U.S. are provided below.

HEU
Nominal Number at Facility 30 Consisting of:
18 standard (23 plates),
1 fresh control
instrumented assembly
2 irradiation (12 plates)
1 standard instrumented
assembly
8 control (17 plates))

Enrichment 93.3 %
Fuel Meat U-Al alloy
Clad Al
Initial U-235(g) /assembly 281 standard
(2 irradiation@146; 1 std
instrumented@281;
and 1 control instrumented @
208 )
8 control @208
Burn-up 40% average


LEU (Non-US origin/Not returnable to the US)

Nominal Number at Facility 16 Consisting of:
10 standard (23 plates)
2 irradiation (12 plates)
4 control (17 plates)
Enrichment 19.8%
Fuel Meat U3Si Dispersion in Al
Clad Al
Initial U-235 (g) / assembly 406 standard (300 control,
212 irradiation)
Burnup (see below)

Only two standard LEU assemblies and one irradiation assembly
are in the core at present. The standard elements have a
burnup of about 7.5% and the irradiation assembly 12.5%.

Note 1: One of the irradiation assemblies is a fresh LEU
assembly. The irradiation assemblies have 12 plates (TR2
1004) with tubes in the center for irradiation activities.
The assembly construction is slightly different from the
standard assembly.

Note 2: The instrumented assemblies are both HEU, one with
little burnup and the other unirradiated.

Note 3: It was identified during this trip that the TR-2 LEU
fuel assemblies does not have uranium enriched in the United
States making this material ineligible for shipment to the US
under the FRR SNF Acceptance Program. However, it is noted
that the FRR SNF Acceptance Program,s EIS is incorrect.

CONDITION OF FUEL

The team did not visit the reactor facility, nor view the
potential fuel that may be shipped. From the previous
assessment conducted in January 2005, all spent fuel is
stored in the large part of the TR-2 pool. Most of the fuel
is stored in two baskets located on the floor of the pool.
The assemblies in the core are located in the TR-2 side of
the pool. The reactor pool is stainless steel lined. All
spent fuel is stored in aluminum racks. Fresh fuel is stored
in a vault located one floor below the reactor.

An evaluation of fuel was previously conducted by WSRC.

FACILITIES RELATED TO PACKAGING


Not conducted during this visit

POTENTIAL TRANSPORTATION ROUTE FROM THE REACTOR TO THE PORT
OF EXPORT

Not discussed during this visit

REGULATORY AUTHORITY

The TR-2 at the ekmece Nuclear Research and Training Center
is part of the Turkish Atomic Energy Authority. There is no
separate nuclear regulatory authority in Turkey at the
present time.

POTENTIAL PROBLEM AREAS

An agreement in principal must be made by Monday, July 18
2005, to allow inclusion of the TR-2 fuel in this planned
shipment. Immediate follow-through on allow pre-shipment
activities must occur to meet the planned shipment schedule
noting that the shipment has already been delayed to the
point that severe problems will occur if the shipment is
further delayed.

DISCUSSIONS, AGREEMENTS, AND ACTIONS


1. The participants discussed the urgent need to reach an
agreement in principal and, if approved, actively work toward
all pre-shipment actions required to initiate the shipment.
The three primary issues discussed involved the applicability
of the Agreement for Nuclear Cooperation between the GOT and
the USG, consideration for unused U-235 still contained in
the HEU that would be shipped, and the schedule for delivery
of additional replacement LEU fuel from a fuel fabricator.
TAEK understood that TAEK,s decision deadline is the close
of business Monday, July 18, 2005. An agreement in principal
is expected to be in the form of an email message from TAEK
to DOE.


2. Previous discussions, agreements, and actions were
documented in the DOE Trip Report from October 12, 1999,
January 14, 2005, and NAC Internationals, trip report dated
March 14, 2005.


3. TAEK understands that DOE has an urgent need to reach
an agreement in principal to establish a shipment of FRR SNF
from the eastern Mediterranean area to include the TR-2 HEU
fuel to arrive in the United States in the calendar year

2005. If the agreement in principal is reached, DOE will
prepare a proposed contract and issue to TAEK the week of
July 18, 2005.


4. DOE and the US Embassy in Ankara explained that the
Agreement for Nuclear Cooperation (hereafter referred to as
Agreement) is being worked between the GOT and the USG
separately and is not part of the discussions or proposals
made under the proposal made by DOE.


5. TAEK and DOE agreed that a shipment may be possible if
an agreement in principal can be reached, particularly
regarding an agreement for consideration for TAEK,s unused
U-235 in the existing HEU fuel. Previous DOE proposals
considered the unused U-235 contained in the HEU fuel which
was rejected noting the lack of an Agreement. TAEK
understood that the current proposal is not contingent on an
Agreement being in place and that appropriate authorizations
have been obtained. Discussions included Dr. Matos,
presentation of justification of the quantity of usable U-235
remaining in the HEU. Although, it is believed that TAEK
understands this point, TAEK desires an exact number of fuel
assembly exchange which is not being offered by DOE.


6. TAEK, DOE, and Mr. Nadal discussed the fuel fabrication
schedule of the proposed 8 LEU fuel assemblies with non-US
origin uranium. Mr. Nadal explained the estimated cost
breakdown for 6 LEU standard assemblies, 2 LEU control
assemblies, the supply of non-US origin uranium for fuel
fabrication, and delivery and logistical cost for the
proposed supply of LEU fuel in consideration for the shipment
of the 30 HEU fuel assemblies to be shipped in the calendar
year 2005 in a accordance with a joint schedule with other
reactor operators. Mr. Nadal also indicated that if a
contract was made with CERCA prior to the end of July, the
fuel might be able to be delivered in February 2006, but also
indicated that April 2006 was more possible. DOE described
that if an agreement in principal is reached, DOE would
provide funding to TAEK to enter into a contract with a fuel
fabricator for fuel fabrication. Mr. Nadal will send a draft
contract to TAEK the week of July 18, 2005 and is considered
almost identical to the contract used to provide the previous
16 LEU fuel assemblies in the early 1990,s. Note: Mr. Nadal
was subsequently able to confirm the transportation mechanism
on commercial aircraft providing a better cost estimate.


7. Mr. Okay CAKIROGLU again raised the issue to keep the
one fresh HEU fuel assembly with an agreement that TAEK would
not use the assembly if an agreement to participate is made.
DOE responded that that was not possible and not in DOE,s
proposal.


8. TAEK and DOE discussed that TAEK currently has uranium
credit at DOE,s Y-12 Facility. According to Y-12 the credit
is for 4.703 Kg at 85.6%, which translates to approximately
21 Kgs of LEU at 19.75% enrichment. Exact amounts must be
verified and is understood that this material is not
available to TAEK until the Agreement is in place and is not
part of this proposal.


9. TAEK, CERCA, and DOE discussed that TAEK currently has
1.7 Kgs non-US origin uranium credit at CERCA which is
available for TAEK,s use, but is not considered in DOE,s
proposal.

End Text.
MCELDOWNEY