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08MANAMA237 2008-04-13 04:29:00 CONFIDENTIAL Embassy Manama
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1.(C) Summary. Chairman of the Bahrain Petroleum Company (BAPCO) Shaikh Salman bin Khalifa Al Khalifa states that as gas talks with Bahrain's neighbors remain sluggish, officials seek to build a nuclear reactor on Bahraini soil. End Summary.

2.(C) In an April 8 meeting on the margins of the Crans Montana Middle Eastern and Central European Economies Forum, Bahrain Petroleum Company (BAPCO) Chairman Shaikh Salman bin Khalifa Al Khalifa (the PM's son) told Econoff that he had been at the forefront of Bahrain's exploration of renewable energy resources. "We are very interested in nuclear energy. We just don't know where we would put the reactor. It's hard to find a suitable spot." Econoff replied that he had understood that Bahrain was not interested in building its own nuclear reactor. "Oh yes." Shaikh Salman replied. "Yes, we are."

3.(C) On Bahrain's efforts to stave off a future energy shortage, he said he continued to urge the Qataris to reach a deal to provide gas to Bahrain. "The problem is that the Qataris have put a moratorium in place on new gas deals." Shaikh Salman said talks aimed at obtaining gas from the Saudis had also not been fruitful. Although Iran has appeared to be Bahrain's most promising option for gas, Shaikh Salman said that Bahrain had not progressed significantly with the Iranians since signing a gas MOU with that country (ref A).




4.(C) As Bahrain struggles to meet an energy shortage set to confront much of the region in coming years, the GOB has signaled clearly its interest in developing nuclear energy (ref B). The country joined the IAEA in September 2007; the King opened the parliament with a speech highlighting Bahrain's "entry into the nuclear age" in October 2007; and Bahrain signed a nuclear energy cooperation MOU with the U.S. in March.

5.(C) However, until now, Post has only heard from GOB interlocutors that Bahrain had no interest in hosting a nuclear reactor; it would participate in a joint nuclear power project within the GCC. It is likely that Sheikh Salman's comments reflect his own often idiosyncratic views, rather than official policy. He has a well-deserved reputation as erratic, ill-informed and ineffective. We believe it highly unlikely that Bahrain would be able to build and operate its own reactor without significant financial and technical assistance. Its small size also mitigates against hosting a reactor. Others, such as Saudi and the UAE, have ample space to locate a reactor far from population centers. Bahrain does not. End Comment. ********************************************* ******** Visit Embassy Manama's Classified Website: XXXXXXXXXXXX********************************************* ******** ERELI