Saudi Arabia has options if U.S. walks from nuclear power deal: minister

By Timothy Gardner

WASHINGTON (Reuters) - Saudi Arabia has international partners it can work with if the United States walks away from a potential deal on nuclear power technology over concerns about nuclear proliferation, Khalid al-Falih, the kingdom's energy minister, said in an interview on Thursday.

"If the U.S. is not with us, they will lose the opportunity to influence the program in a positive way," Falih said after he and Crown Prince Mohammed bin Salman met this week with President Donald Trump, Energy Secretary Rick Perry and other officials on a range of issues.

Perry has been quietly working with Saudi Arabia on a civilian nuclear agreement that could allow the kingdom to enrich uranium and reprocess plutonium, technologies that nonproliferation advocates worry could one day be covertly altered to produce fissile material for nuclear weapons.

The kingdom is also in talks with companies from Russia, China, South Korea and other countries as the race to build two reactors in Saudi Arabia heats up.

Saudi Arabia has said it needs nuclear power to move away from burning crude oil to generate electricity and to diversify its economy. Earlier this month, its cabinet approved a national policy program that limits nuclear activities to peaceful purposes.

Perry hopes Saudi Arabia will buy nuclear power technology from U.S. companies, including Westinghouse, which went into Chapter 11 bankruptcy this year and abandoned plans to build two advanced AP1000 reactors in the United States.

But Salman raised concerns when he told CBS in an interview on Sunday that the kingdom will develop nuclear weapons if its archrival Iran does so.

Some members of the U.S. Congress worry the Trump administration is moving too quickly on a deal that could relax nonproliferation standards and one day help lead to a nuclear arms race across the Middle East.

If Saudi Arabia signs a deal that relaxes the safeguards, the UAE could be free to break its own deal it signed with Washington years ago and enrich uranium. The UAE deal contained the "gold standard" in such 123 nuclear agreements, because it contains the safeguards.

On Wednesday, lawmakers from both parties in the U.S. House introduced a bill that would reform U.S. law to ensure that partners on nuclear energy abandon the pursuit of enriching uranium and reprocessing plutonium. The bill would also harden congressional approval of civilian nuclear deals.

Falih said he was hopeful for a deal with Washington. "It will be natural for the United States to be with us and to provide us not only with technology, but to help us with the fuel cycle and the monitoring, and make sure we do it to the highest standard."

But the kingdom has generous uranium resources it wants to develop. "It's not natural for us to bring enriched uranium from a foreign country to fuel our reactors," Falih said.

"The irony is that if the U.S. chooses not to (seal a deal) then somebody else will and we are fortunate to have many other alternative sources that have agreed to work with us and they will be competing for our programme," Falih said. In that case, "the U.S. will not have a seat at the table," he said.

Perry stuck a similar chord in comments during a congressional hearing on nuclear deals this week. "It appears to me, either Russia or China is going to be a partner in building civil nuclear capability in the kingdom of Saudi Arabia," if the United States does not.

Some nuclear analysts believe it is unlikely that the Saudis would choose to work with Russia because it has partnerships with nuclear projects in Iran.

(Reporting by Timothy Gardner; Editing by Cynthia Osterman)