By Shigeru Sato,
Bloomberg,
1 March 2007

Japan, Russia to Begin Nuclear Fuel Enrichment Talks

Japan will begin talks with Russia aimed at allowing Russian companies to enrich spent nuclear fuel for Japanese power utilities, Trade Minister Akira Amari said.

``Russia can be an important option for Japan for spent fuel enrichment, given that there`s a limited number of providers,`` Amari said at a press conference today in Tokyo. The International Atomic Energy Agency, the United Nations` nuclear regulatory body, must participate in the talks, he said.

Recycling spent nuclear fuel is central to Japan`s energy policy as the global race for natural uranium intensifies. China, India and Vietnam all have plans to build atomic power plants. Tokyo Electric Power Co., Japan Atomic Power Co., and other Japanese electricity companies have a combined 6,400 tons of recovered uranium stored in the U.K. and France.

Russian Energy Minister Viktor Khristenko and Japanese Foreign Minister Taro Aso yesterday agreed to strengthen ties for oil and natural gas development. Russian Premier Mikhail Fradkov will discuss economic and trade relations with Prime Minister Shinzo Abe tomorrow.

``Cooperation in nuclear enrichment would be beneficial for the two countries,`` said Hirofumi Kawachi, senior energy analyst at Mizuho Investors Securities Co. in Tokyo. ``But Russia and Japan must pledge it won`t lead to development of nuclear arms, or the transfer of nuclear material to any other third party.``

Seeking Russian Help

Tokyo Electric and Japan Atomic Power said last week they are interested in seeking Russian help in enriching recovered uranium stored in Europe. Japan Atomic Power said Russia is a possible provider of the enrichment process for its 1,848-ton stockpile in the U.K. and France.

Areva SA, the world`s biggest maker of nuclear power plants, holds 109 tons of recovered uranium owned by Japan Atomic Power in France. British Nuclear Group Sellafield, or BNGS, has 1,739 tons of the company`s spent fuel stockpiled in England, said Isao Tanabe, spokesman for Japan Atomic Power, on Feb. 22.

Amari held a 40-minute meeting with Khristenko today in Tokyo, with discussion centered on energy and trade cooperation, Shin Hosaka, director of the oil and gas division at the trade ministry, told reporters.

Khristenko and Amari reiterated the view that Russia`s proposed 4,300-kilometer (2,700-mile) oil pipeline starting at Taishet in eastern Siberia and terminating near Perevoznaya on Russia`s Pacific coast will strengthen the countries energy relations, Hosaka said.

Japan`s Lobbying

Yesterday, the Russian energy minister told Aso the country has completed a 700-kilometer section of the proposed Siberian oil pipeline.

In the first phase of the project, Russia will build a pipeline to Skovorodino by the end of 2008 and construct an extension line to Perevoznaya in the second. Japan has lobbied for the construction of the pipeline to Perevoznaya to boost imports of crude oil produced in eastern Siberian fields.

On Feb. 13, OAO Rosneft, Russia`s state oil company, said it plans to build a $7 billion refinery at the end of the proposed Siberian pipeline to the Pacific coast so that it can start selling fuel products to Asia and the U.S.

Khristenko briefed Amari on the project today, the Russian Energy Ministry said in an e-mailed statement. Rosneft`s proposal to Japanese companies to take part in the distribution and production of refined products is ``absolutely right,`` Khristenko said, and will be fully supported by the Russian government.

The planned refinery will be able to process as much as 20 million tons of crude a year (400,000 barrels a day), Rosneft Vice President Alexander Sapronov said in February. As much as 90 percent of the facility`s products will be exported to Asia, with a small amount going to the U.S., he said.

To contact the reporter on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net