Russia signs huge Iran nuclear power deal as prelude to political solution

By bne IntelliNews November 12, 2014

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Russia has signed a deal with Iran to build two nuclear power plant units, in a possible prelude to a Russian-brokered solution to Iran's row with the West over its nuclear power programme. The agreement was signed in Moscow between Sergei Kiriyenko of Russia's Rosatom and Ali Akbar Salehi of Iran's Atomic Energy Organization, the two countries' respective state nuclear power agencies.

The memorandum envisages Russia building a further six power blocks, making Iran Russia's number one customer in nuclear power.

“The entire project of constructing nuclear energy blocks in Iran, including the delivery of equipment and fuel, will be under IAEA safeguards and in full compliance with the non-proliferation of nuclear materials just like with the construction of the Bushehr Nuclear Power Plant’s first block,” Rosatom said in a statement.

Russia has already built one nuclear power plant at Bushehr. The two new pressurized water reactors agreed, and possibly a further two, will also be built at the Bushehr site, with a further four to be built at different locations, according to the New York Times.

The agreement is seen as a prelude to a looming deal required by a November 24 deadline that would regulate Iran's future nuclear power programme to prevent Iran developing nuclear weapons.

The plan envisages Russia taking a leading role in Iran's nuclear power programme, with all fuel enrichment to take place in Russia, performed by Rosatom, and spent fuel also to be shipped to Russia. This reflects the current situation at the Bushehr plant, where Russia supplies and reprocesses all nuclear fuel used at the power plant.

The final deal to be signed with Iran may involve Iran's entire uranium stockpile being shipped to Russia for processing into fuel rods for the Bushehr reactor, according to a recent report in the New York Times.

Russia's role in the deal is a rerun of a successful deal brokered regarding Syria's chemical weapons in 2013, furthering US President Barack Obama's campaign to eliminate weapons of mass destruction from the world's hot spots, which he regards as part of his legacy.

Some experts question whether Russia is interested in a deal succeeding, which could mean that Iranian oil can return to global markets, putting downward pressure on the price at a sensitive time for Russia. Rosatom in its statement mentioned that it could in future discuss  “the issue of economic expediency and feasibility of fabricating fuel rod components in Iran". If such discussions were to be positive, it could nix an international agreement on Iran's nuclear programme needed for sanctions to be lifted. 

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