Amman’s nuclear option

Published in MEED, 29 July 2015 Over the past 12 months Amman has made significant progress with its ambition to develop nuclear power.

After almost a decade of planning, it seems that the Jordanian nuclear power project is gradually inching towards a successful conclusion.

The current push towards atomic power began in late 2006, when King Abdullah set up a royal energy commission to develop a new energy strategy. The following January he announced that the country wanted to develop a nuclear energy programme. Agreements to cooperate with the US, UK and others in developing nuclear power soon followed, but such policies take time to move from plans to concrete action and it is only recently that momentum has really accelerated.

In January 2015 Rosatom Overseas, the Russian state-owned company which is partnering with the Jordanian authorities to develop the project, opened a branch office in Amman. Two months later, in March, an intergovernmental agreement was finalised between the Jordanian and Russian teams. The deal sets out the legal framework for the construction of two reactors which will have a combined capacity of 2,000MW and are being built for a cost of some $10bn.

The activity in 2015 follows the signing of a project development agreement in Vienna in September between Rosatom and the Jordan Atomic Energy Commission (JAEC). That set the ball rolling on the two-year pre-contract phase of project. Over the course of this period, the two sides are expected to reach agreement on the details of all the main issues, including the engineering, procurement and construction (EPC) contract, a nuclear fuel supply contract, and the shareholders’ agreement.

The broad terms of many of these issues have already been set. For example, in terms of the shareholding, the Jordan authorities will own a controlling stake of 50.1 per cent in the project company, with the Russian firm taking the remaining 49.9 per cent share.

The costs of the project will be split between the two partners on the same basis. These costs are likely to ramp up significantly in the next few years. At the Jordan International Energy Summit in Amman in May, Dr Khaled Toukan, chairman of the JAEC, said that around $50m would be spent in 2015, rising to more than $150m in 2017 and above $300m in both 2019 and 2020. Spending is due to fall back sharply thereafter. Milko Kovachev, a vice-president of Rusatom, told the same conference that the target financial structure for the project was 70 per cent debt and 30 per cent equity.

The location has also been set. The two plants will be built in the Amra region in central Jordan, some 60km east of the capital. The plants will use reclaimed treated wastewater from the nearby As Samra Wastewater Treatment Plant as their main source of cooling water. While it is unusual to site nuclear plants away from large bodies of water, it is not unprecedented. Toukan points out that the Jordanian plant will have a similar set-up to the large Palo Verde nuclear power plant in the US state of Arizona.

Local media has reported that tribal leaders and other local residents in the vicinity of the planned site have been unsurprisingly unhappy about the project and have vowed to resist it.

Assuming the project moves ahead as planned, however, construction of the first nuclear power plant is due to start in or around 2017 and it should be ready to begin commercial operations sometime between 2022 and 2024. Once complete, the plants are expected to have a 60-year operating life, with a further extension of 20 years possible.

Another Russian firm, AtomStroyExport, will supply the technology for the nuclear plant and Rosatom will be the operator of the plant. A Rosatom subsidiary, TVEL Fuel Company, will be the provider of fuel for the plants under a deal covering the life-time of the reactors. Jordan could itself be the source for at least some of the fuel needed, if its uranium exploration efforts come to fruition.

“A nuclear fuel company of Rosatom is expected to be contracted as a supplier of the nuclear fuel for the first Jordanian nuclear power plant,” says Roman Dyukarev, a spokesman for Rosatom. “Exploration and extraction of uranium in Jordan is one of the agenda items for the detailed discussion.”

Many other important details have still to be worked out. The start date for power production at the nuclear plants has yet to be finalised, for example, and may not be finalised until 2016. “The date of the start of commercial operation of the first and second unit of the nuclear power plant is to be set in the EPC contract that will be signed at the end of the pre-contract phase,” explains Dyukarev.

Although the power project is an important development for Jordan, the Russian plant will not in fact be the first nuclear reactor to be up and running in the country.

A consortium of the Korean Atomic Energy Research Institute (Kaeri) and Daewoo Engineering & Construction, also from South Korea, are currently developing the Jordan Research & Training Reactor (JRTR) at the Jordan University for Science & Technology in Irbid, with assistance from US consulting firm Advanced Systems Technology & Management.

The World Nuclear Association, a trade body, says that the research reactor will be partly financed partly by a $70m soft loan from South Korea, repaid over 30 years at an interest rate of just 0.2 per cent.

Construction work on the reactor was about 75 per cent complete as of the end of April 2015. Toukan told the local Petra news agency that month that the first deliveries of nuclear fuel for the research reactor are scheduled for later in 2015. There is then likely to be a six-month long testing period, but the reactor should be fully up and running by June 2016. The fuel for the plant will be supplied by France’s Areva under a contract signed in April 2013.

The reactor will have a power generating capacity of just 5MW, which could be expanded to 10MW in the future. Although small in scale, it will mark an important step for Jordan as it builds up its nuclear capabilities. The JRTR will be used for neutron beam research and medical services such as radioisotope production and it will also play an important role in the training of a new generation of Jordanian nuclear engineers and scientists.

The fuel supply contract for the JRTR is something of a consolation prize for Areva in terms of the Jordanian nuclear programme. The French firm is a joint venture along with Japan’s Mitsubishi Heavy Industries in the Atmea company and t ATMEA1 reactor design had been shortlisted for the main nuclear technology contract. However, it eventually lost out to the Russian AES-92 model in October 2013.

As Rosatom is keen to point out, there is already one example of its design up and running, in the shape of the Kudankulam nuclear power plant in the southern Indian state of Tamil Nadu. The first power unit at the site, a 1,000 MW reactor, was connected to the power grid in October 2013. A second unit is due to follow later in 2015, followed by up to four more units.

Areva has also been heavily involved in uranium exploration in Jordan in the recent past. In October 2008, JAEC signed a deal with the French firm to explore for uranium in the centre of the country, in a 50/50 joint venture known as the Jordanian French Uranium Mining Company (JFUMC). Over the following four years, around 6,000 boreholes were drilled and chemical analysis was carried out on 13,000 samples.

However, the work came to an end in 2012, with both sides apparently happy to conclude the initiative. “The exploration agreement signed with the JAEC in 2008 included a suspension clause,” says an Areva spokesman. “In 2012, due to difficult market circumstances, we decided to no longer continue the partnership in light of the difficult economic conditions expected.”

Samer Kahook, CEO of the Jordanian Uranium Mining Company (JUMC), said in May that the agreement was terminated because the joint venture had failed to deliver on crucial milestones and that JAEC had decided that it was better for Jordan to continue with its uranium exploration activities independently.

Since then, uranium exploration in Jordan has been carried out by the JUMC. Kahook says that Jordan has now confirmed that it has some 28,400 tons of deposits of triuranium octoxide, a uranium compound, as per the standards of the Australasian Code for Reporting of Exploration Results, Mineral Resources & Ore Reserves, known as the JORC Code.

Jordan is one of several countries around the region pursuing nuclear power projects at the moment. Egypt, Saudi Arabia and the UAE are also pushing ahead with their plans, and Iran has of course been a controversial advocate of nuclear power for some time.

It is not hard to see why Jordan is so keen to join this nuclear club. Jordan has to import around 94 per cent of its energy needs, according to data from the Ministry of Energy & Mineral Resources. The vast majority of this enters the country in the form of crude oil, diesel and natural gas. Not only is this costly, it is also frequently unreliable. The country has struggled with significant supply problems over recent decades, first from Iraq and more recently from Egypt. At the same time, its energy needs are projected to rise quickly in the coming decades with more than 15,000MW of electricity generating capacity needed by 2040.

If all goes to plan, nuclear energy will be providing 20 per cent of Jordan’s electricity needs by 2040, according to Toukan. As he pointed out to the audience at the Amman conference in May, this gives Jordan a far greater security of energy supply. It also opens up the possibility that, after decades of relying on others, it may even be able to export some excess energy to neighbouring countries.