Areva, Westinghouse in talks with India to build nuclear plants

Punj Lloyd Limited, a leading conglomerate offering engineering, procurement and construction (EPC) services for the oil and gas, infrastructure, and petrochemicals sectors, is in talks with Areva SA and Westinghouse Electric Company LLC, a Toshiba group company, to form a joint venture for building nuclear plants in India.

Punj Lloyd intends to leverage its expertise in the EPC business while capitalizing on the design capability of its fully owned U.K.-based subsidiary Simon Carves Limited. Simon Carves, a leading global engineering firm providing design and consulting services, has about 3.5 million person-hours of experience in the nuclear sector.

Punj Lloyd enjoys good business ties with Areva and is presently implementing various transmission and distribution projects for the firm. Nuclear cooperation between the companies will further strengthen this relationship.

Areva has a significant presence in the nuclear power market in India.

The company, in collaboration with Nuclear Power Corporation of India Limited (NPCIL), an enterprise that is wholly owned by the Indian government, is solely responsible for generating power from nuclear fuels in the country and plans to build two to six nuclear reactors in India. According to the agreement, Areva will supply 300 tons of uranium for the planned pressurized reactor units.

Two reactors are expected to be set up in Jaitapur, Maharashtra, and four more will likely be built at the same site in the future.

Punj Lloyd recently forayed into the domestic nuclear power market. In December 2008, the company signed a memorandum of understanding to form a 50:50 joint venture company with Thorium Power Limited for building nuclear power plants in India. The joint venture will offer a range of technology consulting, advising and training services for setting up nuclear plants in India based on the thorium fuel technology.

Punj Lloyd will provide EPC expertise to the collaboration, while Thorium Power will offer its assistance to use thorium as a fuel in light water reactors for generating power.

The joint venture is likely to attract an initial investment of $1 billion to tap the high-growth commercial nuclear power market in the country. The new company also plans to take up projects for operating reactors and will identify new markets to deploy Thorium Power's nuclear fuel designs in Southeast Asia.

India has nearly 32% of the world's thorium reserves and plans to develop a thorium fuel cycle for application in 12 indigenously built nuclear reactors. High availability of thorium makes it an economic fuel compared to uranium.

However, India currently has only pilot versions of thorium-based reactors in operation.

The joint venture with Punj Lloyd provides Thorium Power with a good opportunity to participate in the nuclear power development cycle and produce clean power in India.