Shaw takes on ABWR and takes greater role at STP

3 December 2010

The Shaw Group Inc and Toshiba Corporation has begun an expanded global strategic partnership.

Under the agreement, Shaw will have certain exclusive opportunities for providing engineering, procurement and construction services for new Toshiba Advanced Boiling Water Reactor (ABWR) nuclear power plants worldwide, except in Japan and Vietnam.

Shaw immediately will assume the role of engineering, procurement and construction contractor for the South Texas Project Expansion in a newly restructured EPC organisation with consortium partner Toshiba America Nuclear Energy, a U.S. based Toshiba subsidiary.

Shaw will invest $250 million for an ABWR alliance with Toshiba, $100 million of which will be available as a credit facility for NINA to assist in financing the development of the South Texas Project. The credit facility will convert to equity in NINA upon the satisfaction of certain conditions including the project receiving full notice to proceed, which is expected in mid-2012.

The South Texas project is being run by Nuclear Innovation North America (NINA), a partnership between NRG and Toshiba focused on developing new nuclear expansion projects using Advanced Boiling Water Reactor (ABWR) technology. NINA is currently developing the 2,700 megawatt South Texas Project expansion with San Antonio’s CPS Energy and the South Texas Project Nuclear Operating Company.

"Toshiba and Shaw have a proven relationship combining our expertise and resources in nuclear power," said J.M. Bernhard Jr., Shaw's chairman, president and chief executive officer. "Now with our agreement with Toshiba, Shaw is able to promote not only Westinghouse AP1000, the world's first Generation III+ nuclear technology, but also ABWR, the world's most proven advanced nuclear technology, to our customers."

Shaw has also begun negotiations to extend its AP1000 deal for a further four years. Shaw and Westinghouse are under contract to provide engineering, procurement and construction services for six new AP1000 nuclear power units in the U.S, as well as four units currently under construction in China.

An undisclosed amount for initial services for the South Texas Project will be added to Shaw's Power segment's backlog of unfilled orders in the first quarter of fiscal year 2011.

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