JEDDAH: French nuclear firm Areva and the Saudi Binladin Group were expected to sign a partnership agreement Monday to work together on nuclear and solar technologies, Areva's chief executive Anne Lauvergeon said in Riyadh. State-controlled Areva is the global leader in the manufacture of nuclear reactors, while Saudi Binladin is a diversified construction company with headquarters in the Saudi port of Jeddah. “We think that on solar thermal in Saudi Arabia, there's an important market and we are partnering with Saudi Binladin Group to develop this,” Lauvergeon said. Areva is not planning to sell a stake at this stage, but Lauvergeon did not rule out the possibility that Areva would issue Islamic bonds in the future. Saudi Arabia wants to cut fossil fuel use within the next several decades, while developing expertise in other technologies as it seeks to capitalize on an imminent global energy revolution, officials said at the event. The Kingdom is entirely reliant on oil and gas for its power needs, consuming around 3.4 million barrels per day of oil equivalent in 2010. For several years the Kingdom has had a growing interest in gas development to displace oil use and support related industries, such as petrochemicals, and the expansion into nuclear and solar is an extension of its ongoing economic diversification strategy. Hashim Yamani, president of the King Abdullah City for Atomic and Renewables Energy, said Saudi power demand is expected to triple to 120GW by 2050 from around 40GW currently. “Nuclear and renewable energy will reduce dependence on fossil fuels by 2050,” he said. “Nuclear would be adequate for the base load, we'll use renewables to add more capacity, there are some variations – gas and oil will have to continue to help.” Areva in late December carried out a €900 million ($1.2 billion) capital increase. The Kuwaiti sovereign fund invested €600 million in the company in exchange for a 4.8 percent stake, while the French state subscribed to a further €300 million. In mid-December, the French energy/industry minister had raised the prospect of a two-tiered transaction following earlier government announcements that up to 15 percent of Areva's capital could be up for grabs as part of plans to inject around €3 billion of capital into the majority state-owned company. A second stage early this year would be open to other bidders, including Qatar's sovereign fund, Japan-based Mitsubishi Heavy Industries, EDF and possibly Alstom, earlier reports said.
