SAUDI ARABIA'S NUCLEAR ENERGY PLANS

UNCLAS SECTION 01 OF 02 RIYADH 001864 SIPDIS COMMERCE FOR SARAH LOPP STATE FOR MARC HUMPHREY E.O. 12958: N/A TAGS: ENRG TRGY BEXP BTIO SA SUBJECT: SAUDI ARABIA'S NUCLEAR ENERGY PLANS REF: A. SECSTATE 127423 ¶B. SECSTATE 65500 ¶C. RIYADH 1667 ¶D. RIYADH 1244 -------------- KEY POINTS -------------- -- Key Saudi officials have made clear their intention to acquire nuclear energy but as yet have not developed specific plans. -- These Saudi officials have expressed an interest in nuclear development with the U.S. as its partner, an interest formalized with an agreement signed by President Bush and King Abdullah in May 2008. -- U.S.-Saudi cooperation is on hold until Saudi Arabia deposits a nuclear Safeguards Agreement with the IAEA, which Saudi officials assure is coming soon. -- Saudi officials have shown an interest in working with U.S. commercial firms in the nuclear energy field. -- Foreign competitors, including France, Russia, Belgium, and Canada, are lobbying for future nuclear-related contracts. -------------- Nuclear Planning at a Formative Stage -------------- ¶1. Saudi Arabia has only recently begun to examine how nuclear energy can best meet its national needs. Government statements have noted that Saudi Arabia would benefit from the ability to produce electricity from nuclear sources as well as to power expanded desalination operations. Part of the Saudi rationale is to reduce the domestic consumption of oil in order to free up more of this revenue-producing resource for export. Saudi officials regard the acquisition of nuclear power to be important to Saudi Arabia's future, while insisting that they are in no hurry. ¶2. The organization charged with leading the Saudi planning effort is the King Abdulaziz City for Science and Technology, headed by its President, Dr. Mohammed Al-Suwaiyel. King Abdulaziz University in Jeddah, which hosted an International Symposium on the Peaceful Uses of Nuclear Energy in November, has also played a role in bringing academic and technical attention to the issue of civil nuclear development in the region. ¶3. In May 2008, King Abdullah and President Bush signed an agreement that pledged U.S. support for Saudi Arabia as it builds a peaceful nuclear energy program. Since then there have been two visits by the State Department's acting Assistant Secretary for International Security and Nonproliferation Affairs to discuss future U.S.-Saudi cooperation on nuclear development. The next step to be taken toward launching this cooperation is the conclusion of a 123 Agreement. However, USG has made clear that prior to closing a 123 Agreement, Saudi Arabia must deposit a Safeguards Agreement letter with the IAEA, which has not yet been done. Saudi officials have given the Embassy repeated assurances over recent months that the Safeguards Agreement will be deposited soon and that it is only a matter of completing a few administrative procedures. ¶4. Two Saudi officials who appear to be leading the planning of Saudi Arabia's nuclear future are Dr. Prince Turki Saud Mohammed Al-Saud, Vice President for Research Institutes at KACST and Dr. Khalid Aleissa, Director of the KACST Atomic Energy Research Institute. At the Ministry of Foreign Affairs, the nuclear planning portfolio has been put in the hands of Dr. Prince Turki Saud Al-Kabeer, Undersecretary for Multilateral Affairs. ¶5. Saudi Arabia has virtually no nuclear-trained indigenous workforce. King Abdulaziz University in Jeddah would likely be the primary domestic institution mobilized to produce a generation of Saudi nuclear engineers once plans take shape. Nonetheless, it can be expected that any near movement to develop civil nuclear power would require significant foreign manpower and expertise. -------------- Opportunities for U.S. Business -------------- RIYADH 00001864 002 OF 002 ¶6. There appears to be strong potential for U.S. firms to participate in the design and building of Saudi Arabia's nuclear industry. At the moment, Saudi officials appear to be looking to the U.S. to play a major role. The two key KACST planning officials mentioned above, for example, requested to visit the U.S. in December 2008 to consult with U.S. commercial companies in the nuclear field with the objective of studying nuclear technologies appropriate for Saudi Arabia. However, the KACST officials were advised that such a visit would not be supported or appropriate unless and until a Safeguards Agreement was on deposit with the IAEA. ¶7. Several other nuclear supplier countries are engaging Saudi Arabia, including China, France, Belgium, Canada, and Russia. Representatives of companies or research institutes from each of these countries attended last month's symposium held by King Abdulaziz University in Jeddah. RUNDELL