Continued Ukraine-Russia tensions over fuel

7 June 2016

Ukrainian nuclear utility Energoatom has breached the terms and conditions of the contract with Russian fuel company TVEL for fuel supplies to Ukraine's NPPs, Oleg Grigoriev, TVEL vice president for commerce and international cooperation, told journalists on 30 May. He noted that in 2010 the parties had signed a fuel supply contract for all Ukraine's NPPs until the end of their service life - until approximately 2042-2043 taking into account life extensions. Under this contract, Energoatom had the right to use fuel of another producer (Westinghouse Electric Co) on a limited scale.

During 2015 Ukraine bought Russian fuel assemblies totalling $610.9m and US-made assemblies totalling $32.7m. However, between January and March 2016, Energoatom bought fuel assemblies for its NPPs totalling $80.5m, of which TVEL's share was $47.3m (59%) and that of Westinghouse Electric Sweden (Swedish arm of the US company Westinghouse Electric) $33.2m (41%). In December 2015 Ukraine's minister of energy and coal industry Vladimir Demchishin had stated that in 2016 a share of Westinghouse Electric's nuclear fuel supplies would be increased to 40%. Large-scale use of the US fuel is now planned.

"We consider this a breach of the contract terms," Grigoriev said. He pointed out that TVEL has net received yet any official notification from Energoatom regarding full core charge of the US fuel in a reactor at the South Ukrainian NPP. "As soon as it happens, we will defend our rights," he said. However, he added that TVEL would not suspend fabrication of nuclear fuel for Ukraine in spite of the fact that Energoatom's accounts had been frozen because of litigation. In March, Ukrainian law-enforcers froze Energoatom's assets and bank accounts over allegedly unpaid debts. The company has appealed against the charges in court but no decision has been reached yet and the accounts remain frozen.

However, lack of payment is delaying the return of used fuel from Ukraine too Russia for reprocessing. Russian state nuclear corporation Rosatom has delayed acceptance of the first batch of used nuclear fuel from Ukraine this year because of Energoatom's failure to pay. Oleg Kryukov, director of public policy on radwaste, used fuel and nuclear decommissioning at Rosatom, told journalists at the VIII International Forum ATOMEXPO 2016: "The contract is in force but there are problems with payments in Ukraine now due to a suit against Energoatom and the freezing of its accounts. There are no payments; therefore, we had to postpone taking back the first batch of used fuel this year," Kryukov said. However, he added that Rosatom intends to continue working under this contract.

Russia takes back fuel from Ukraine under a scientific-technical and economic cooperation agreement signed in 1993. A representative from Energoatom said in April that between 2016 and 2018 Ukraine was planning to ship more than 1,000 used fuel assembly units to Russia. In the future Ukraine plans to store and reprocess all nuclear fuel inside but the necessary facilities for this are not yet in place.

Despite these problems, Ukraine plans to extend its uranium enrichment contract with Russia in 2016. Oleksandr Rybchuk, director of Energoatom's autonomous department Atomprojectengineering told journalists at the ATOMEXPO 2016 forum that Ukraine buys 60,000 separative work units every year and plans to extend the contract this year with the International Uranium Enrichment Centre (IUEC) based at Angarsk in Russia. Rybchuk said that the amount of deliveries for 2016 would not change, but supplies for the period after 2017 have not yet been discussed. Ukraine enriches its own uranium concentrate using IUEC facilities of which it is a member. It supplies about 80t of uranium concentrate as part of the project every year.

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