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What we know about the progress on Saudi-US nuclear deal discussions

Published: Updated:

The Trump administration is eager to strike a deal with Saudi Arabia to share nuclear power technology with the kingdom as its domestic industry struggles to compete with lower-priced power sources such as natural gas, according to Reuters.

Before any US sale, the Trump administration needs to strike a nuclear cooperation pact, known as a “123 agreement,” with Saudi Arabia.

In such an agreement, countries make pledges about how they will and won’t use the nuclear equipment they could buy from the US.

Energy Secretary Rick Perry visited Saudi Arabia earlier this month to talk about the potential deal. Perry has said he told the kingdom it is important for it to be perceived to be strong on non-proliferation.

House of Representatives and the Senate will start discussing the No Nuclear Weapons for Saudi Arabia Act, so-called 123 agreement, with the kingdom.

A 123 agreement, named after the section of the 1954 Atomic Energy Act that requires it, sets the terms for sharing US peaceful nuclear energy technology, equipment, and materials with other countries.

Nuclear reactors

Saudi Arabia has ambitious plans for nuclear power, but currently has no nuclear power plants. The kingdom plans to construct 16 nuclear power reactors over the next 20 to 25 years at a cost of more than $80 billion, according to the World Nuclear Association.

It has solicited bids for the first two reactors and hopes to sign contracts by the end of this year. This year, the kingdom put the United States on a short list of countries for a deal. The winner will likely be selected next year, according to many reports.

Energy Secretary Rick Perry led an interagency delegation to London in late February to discuss a pact, with a Saudi delegation led by Saudi Arabian Minister of Energy and Industry Khalid Bin Abdulaziz al-Falih.


Continuous session

Usually, most nuclear cooperation agreements can enter into force after 90 days of so-called continuous session. “Not only are we not interested in any way to diverting nuclear technology to military use, we are very active in non-proliferation by others,” Saudi Energy Minister Khalid al-Falih said at a joint press conference with Secretary Perry.

According to VOX, energy experts say that it certainly makes sense for Saudi Arabia to look into new ways to generate energy so that it can export more of its oil before the value of oil plunges in the future.

US reactor builder Westinghouse, which is owned by Brookfield Asset Management, would likely sell nuclear technology to Saudi Arabia in any deal. Also, experts say that Saudi Arabia is in talks with private firms from Russia, China, and South Korea to build two reactors.

According to the expert Gary Norman, speaking to Oilrprice, “walking away from the deal would be walking away from any chance of having a piece of that pie, and as Saudi energy minister Khalid al-Falih said, “If the US is not with us, they will lose the opportunity to influence the program in a positive way.”

“The Trump administration may be keen to bend these agreements to its will, but if it overplays its hand it stands to lose the most. Indeed its filibustering may already have led to its undoing, not only in terms of investment, but in terms of geopolitical influence on the whole,” Norman added.