February 7, 2011 / 5:04 PM / in 7 years

UPDATE 1-Rosatom may drop Bulgaria nuclear project-Ifax

(Adds details)

MOSCOW, Feb 7 (Reuters) - Russian state company Rosatom may drop a project to build a nuclear power station in Bulgaria, Interfax news agency said on Monday, quoting an internal Rosatom document.

Rosatom and Bulgarian power utility NEK last month signed a memorandum of understanding to set up a project company to build the Balkan country’s second nuclear plant in Belene. Two reactors, each with capacity of 1,050 megawatts, were planned.

Interfax said the head of Rosatom’s marketing and business development department, Alexei Kalinin, wrote in an internal letter that Rosatom subsidiary Atomstroyexport may sue NEK after a failure to sign documents needed to begin construction work in September 2011.

“NEK’s management is reluctant to sign an appendix to the contract, despite an earlier reached agreement to sign it in December 2010,” Interfax quoted the letter as saying.

According to Interfax, Kalinin wrote that Bulgaria would pay Rosatom more as a penalty for cancellation of the project than the company would get in potential profit, and he recommended that the firm pull out.

Rosatom was not available for comment.

The Bulgarian economy and energy ministry said it would not comment on unofficial information.

According to Interfax, the letter said the company would then have to inform equipment suppliers to the project -- Germany’s Siemens (SIEGn.DE) and France’s Areva CEPFi.PA -- about cancellation of orders.

Fortum FUM1V.HE, Finland’s top energy group, is also taking part in the project.

Interfax said Kalinin alleged that the Bulgarian government deliberately created an atmosphere of uncertainty around Belene, undermining investors’ confidence, and added that he did not expect any changes in such policy.

Bulgaria had contracted Atomstroyexport to build Belene in 2006, but the centre-right government of Boiko Borisov put the project on hold in 2009, saying it needed to check its feasibility. (With reporting by Tsvetelia Tsolova, writing by Gleb Bryanski, editing by Jane Baird)

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