UPDATE 2-Saudi to sign nuclear deal, cut fossil fuel use

Sun Jan 23, 2011 6:35pm GMT

* Kingdom to reduce use of fossil fuels as demand rises

* Areva to sign nuclear deal amid high interest in region (Adds quotes, background)

By Reem Shamseddine

RIYADH, Jan 23 (Reuters) - Top oil exporter Saudi Arabia wants to cut fossil fuel use within the next several decades, it said at an industry event where nuclear reactor maker Areva CEPFi.PA is set to sign a major deal with a Saudi partner.

Although it sits on the world's largest oil and gas reserves, Saudi Arabia is struggling to keep up with rapidly rising power demand as petrodollars have fueled a Gulf-wide economic boom as well as a rapid population growth.

Anne Lauvergeon, chief executive of the French nuclear reactor company, told reporters that Areva will sign a partnership agreement with Saudi Arabia's Binladin Group for nuclear and solar energy. She gave no specific figure.

"We think that on solar thermal in Saudi Arabia there's an important market and we are partnering with Saudi Binladin Group to develop this," Lauvergeon said.

The agreement with Areva, which is 90 percent-controlled by the French government through direct and indirect holdings, was due to be signed on Sunday.

Saudi Arabia wants to cut domestic oil consumption within the next several decades as it diversifies its energy mix including nuclear, Hashim Yamani, president of the King Abdullah City for Atomic and Renewables Energy, told reporters.   Continued...

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