Oil-for-Reactor Deal With Russia

Oil-for-Reactor Deal With RussiaOil-for-Reactor Deal With Russia

Iran and Russia have reached an agreement to build two ‘generation III’ nuclear reactors in Bushehr Province, which will be funded via an oil barter, chairman of nuclear and alternative energy committee of the parliament’s energy commission said in Tehran Sunday.

“The Russians will build two reactors in Iran, two years apart, each with a capacity of 1,000 megawatts,” Shana quoted Jalil Jafari Boneh Khalkhal as saying.

The projects “will not burden the public budget” since they will be financed via an oil barter, he noted. The new plants are expected to create jobs for 14,000 people.

A generation III nuclear reactor is a design-development of any generation II nuclear reactor, which incorporates evolutionary improvements to the design during the reactor’s lifespan. These include improved fuel technology, superior thermal efficiency, passive safety systems and standardized design for reduced maintenance and capital costs.

Jafari stressed the new reactors will be earthquake and tsunami resistant and save fossil fuel consumption by $10 million per day.

The electricity that is now being generated from fossil fuels can be produced in nuclear power plants, and thus, the conserved fuels can be exported, developing the value chain, he said.

Iran’s increasing domestic demand for electricity has created a supply shortage during peak demand periods. Iran recently increased electricity prices as part of its energy subsidy reform, in the hopes that it will check demand. Natural gas is the primary fuel source for generating electricity.

Russia will in addition offer support to Iranian experts in manufacturing fuel rods as part of the agreement.

Earlier this year, Oil Minister Bijan Namdar Zanganeh and Russian Energy Minister Alexander Novak signed four economic and commercial agreements, including the construction of eight new power plants in Iran by Russian firms.

The national Iranian Gas Company (NIGC) also signed a MoU in September with a Russian company for construction of Iranshahr-Chabahar pipeline, which requires $700 million worth of investment.