EGYPT: SECRETARY BODMAN DISCUSSES CIVILIAN NUCLEAR

C O N F I D E N T I A L CAIRO 000190

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STATE FOR NEA/ELA (NAFZIGER)
DOHA FOR ECON
VIENNA FOR AMB SCHULTE

E.O. 12958: DECL: 01/29/2023
TAGS: ENRG EWWT SENV EG
SUBJECT: EGYPT: SECRETARY BODMAN DISCUSSES CIVILIAN NUCLEAR
ENERGY, SUEZ TRANSIT FEES

REF: A. CAIRO 84

B. 07 CAIRO 3464 (NOTAL)

C. 07 CAIRO 3406

Classified By: Ambassador Francis Ricciardone
for reasons 1.4 (b) and (d).


1. (C) Summary: During his January 23 visit to Cairo,
Secretary of Energy Bodman reinforced to official and

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commercial audiences the need to pursue energy security
through diversity, increase electricity supply to fuel global
economic growth, and invest in increased efficiency and
renewable energy resources. In his meeting with President
Mubarak, Secretary Bodman encouraged Egypt to consider
joining the Global Nuclear Energy Partnership (GNEP),pressed
Mubarak on Egypt's stances at the IAEA related to Iranian
enrichment, and highlighted Qatari desires to strike a deal
with the Suez Canal Authority for the transit of LNG destined
for the U.S. market. Secretary Bodman also met with the
Egyptian ministers of Electricity and Petroleum, addressed a
large American Chamber of Commerce luncheon, and discussed
energy transit issues with the Suez Canal Authority Chairman.
End summary.

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Civilian Nuclear/Renewable Energy Cooperation
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2. (C) In meetings with President Mubarak and Minister of
Electricity and Energy Hassan Younes, Secretary Bodman
encouraged increased cooperation in civilian nuclear and
renewable energy and encouraged Egypt to consider joining
GNEP. Secretary Bodman also pressed Mubarak on Egypt's
stances at the IAEA related to Iranian enrichment, expressing
his hope to the President that Egypt would be more helpful on
this file. Mubarak did not directly address the IAEA issue,
although he expressed his oft-repeated distrust of the
Iranians and their intentions.


3. (SBU) Bodman expressed to both President Mubarak and
Minister Younes our desire to boost cooperation on safe,
proliferation-resistant nuclear energy and reiterated
President Bush's commitment to GNEP and to the role of
nuclear power in addressing energy needs. The Secretary
invited Minister Younes and a team of technical experts to
visit the U.S. and encouraged the Egyptians to also plan to
visit the National Renewable Energy Lab in Colorado. Younes
reaffirmed Egypt's strategic relationship with the U.S. in
the energy sector, welcomed the invitation, and said he
looked forward to coordinating a visit in the near future.
Younes reported that Egypt hopes to issue a tender by
mid-February for the naming of an international consultant to
guide their civilian nuclear energy program, and expects to
announce the winning bid by the end of 2008.


4. (SBU) Chairman of the Egyptian Atomic Energy Authority Dr.
Aly Islam and Chairman of the Nuclear Materials authority
praised the January 14 - 16 nuclear power seminar held at
Lawrence Livermore National Laboratory and said they
benefited greatly from the presentations and the interaction
with counterparts from the Middle East/North Africa region.
Ibrahim affirmed that the addition of nuclear power will be
necessary for Egypt to meet future energy demands. He cited
their preparatory work with the IAEA up to the present,
highlighting the current development of a 2008-9 training
plan, workshops to promote project management capabilities,
and ongoing discussions regarding fuel supply and finance.
In response to the Secretary's question regarding university
linkages to the nuclear power program, Ibrahim acknowledged
that Egypt must enhance its nuclear science programs, and is
therefore working on a national plan for developing necessary
human resources to augment the nuclear engineering department
at the University of Alexandria. Minister Younes highlighted
capacity building programs as a key area in which Egypt could
benefit from international support.


5. (SBU) Egypt is moving forward with plans to increase
renewable sources' share of electricity production, with the
stated goal being 20 percent by 2020. Currently, hydro power
accounts for 12.6 percent of installed capacity, but with no
opportunities for expanding this resource, Egypt will need to
achieve the balance through wind and solar power. Younes
said that he expects two new wind projects, supported by
Denmark, Spain, the EU, and Japan, to add 340 MW of installed
capacity by the end of 2009. Younes said he expects the
first solar/thermal plant, located 65 miles south of Cairo at

Kuraymat, to come on line in 2010 and add 140MW to the grid.
Younes also announced that the EU has chosen Egypt as a site
for the opening of a Regional Center of Excellence for
renewable energy.

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Oil and Gas
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6. (C) Secretary Bodman expressed to President Mubarak our
desire for successful negotiations between Qatar and the Suez
Canal Authority that would allow for increased shipments of
U.S.-destined Qatari LNG through the canal, and followed up
directly later that afternoon with Suez Canal Authority
Chairman Admiral Ahmed Fadel. Mubarak and Fadel welcomed our
interest in the deal and said that they would work with the
Qataris to achieve a reasonable outcome.


7. (SBU) In his meeting with Minister of Petroleum Fahmy,
Secretary Bodman expressed U.S. opposition to the formation

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of an OPEC-style gas cartel and asked for Egypt's continued
support in resisting such an arrangement. Both agreed that
such a group would hinder the efficient operation of the
market. Fahmy touted recent investment and production
increases in the sector and expansion of refining capacity,
and noted discoveries of commercial quantities of crude in
Upper Egypt as well as gas discoveries in the Western Desert.

RICCIARDONE