Pakistan in Talks to Acquire 3 Nuclear Plants From China
The 3 Large Plants Would Cost Some $13 Billion and Would Cement Strategic Regional Alliance
By SAEED SHAH
Updated Jan. 20, 2014 6:59 p.m. ET
ISLAMABAD, Pakistan—Pakistan is in talks with China to acquire three large nuclear power plants for some $13 billion, Pakistani officials said, in a further blow to international efforts to restrict the trade in nuclear technology.
The deal is in addition to last year's agreement to build two Chinese reactors in Pakistan's southern port of Karachi.
The agreement, if reached, would help plug the crippling gap in Pakistan's electricity supply and cement its strategic regional alliance with China, which is aimed against mutual rival India. Alarming Washington, the China-Pakistan nuclear trade bypasses international rules against nuclear exports to countries—like Pakistan—that have not signed the Non-Proliferation Treaty.
Negotiations are going on currently with China "for three more plants," Prime Minister Nawaz Sharif told his cabinet's meeting this month, according to those present.
The three Chinese reactors would likely be located in the center of the country, in Punjab province, at a site now being prepared, officials said. Two advanced 1,100-megawatt reactors from China are already due to be built near the southern port of Karachi, under a $9 billion agreement completed last year. Mr. Sharif led the groundbreaking ceremony for the Karachi reactors in November but the discussions about the additional plants have not been made public until now.
Fixing Pakistan's electricity crisis is a top priority of Mr. Sharif's government, which was elected in May last year. The shortage of energy is a major constraint to Mr. Sharif's plans to boost growth and pull Pakistan out of its downward spiral of violence and economic woes. Coal, hydro and nuclear energy plants are all planned to plug the shortfall.
However, an international body called the Nuclear Suppliers Group, of which China is a member, is supposed to bar the export of nuclear technology or fuel to countries that have not signed the NPT. Pakistan possesses nuclear weapons and isn't a signatory. Moreover, the leading scientist behind the Pakistani nuclear program, A.Q. Khan, has been involved in spreading the country's nuclear know-how to countries such as North Korea and Libya.
A senior U.S. official said about the latest reactors plan: "This does cause us concerns because of the commitments within the Nuclear Suppliers Group. It is also a U.S.-China issue."
However, China says that its nuclear trade with Pakistan predates its membership of the Nuclear Suppliers Group, and is therefore protected. India is also not a signatory to the Non-Proliferation Treaty but the 2005 U.S.-India civil nuclear deal led to India being given an exemption to import nuclear materials by the Nuclear Suppliers Group.
"The India-U.S. nuclear deal was discriminatory," said Mushahid Hussain, a lawmaker for the opposition Pakistan Muslim League-Quaid and head of the Senate defense committee. "It was meant to prop up India against China."
Mark Hibbs, an expert on nuclear issues at the Carnegie Endowment for International Peace, an independent research organization based in Washington, said that the Nuclear Suppliers Group was "clearly in a crisis that has continued to escalate" as a result of the trade taking place with India and Pakistan. The rules of the group had no binding force, as it is a voluntary arrangement, he said.
Although the U.S.-India nuclear deal is about nuclear power plants, Pakistan sees it as also having military implications. The agreement allows India to source uranium on the international market, freeing up its indigenous uranium for use in its nuclear weapons program. China's unilateral trade with Pakistan provides Islamabad with similar benefits, analysts say.
Pakistan produces between 12,000 MW and 14,000 MW of electricity, while demand is at least 18,000 MW, according to the ministry of power, causing hours of power outages every day across the country. Demand is set to rise sharply with the ballooning population.
Nuclear energy provides just 750 MW of power currently, through two Chinese-built 330 MW plants at Chashma, in Punjab province, and a tiny, aged, plant outside Karachi. China is currently building two more plants of the same size at Chashma, boosting nuclear output to 1,400 MW by 2016. The plan for the future is to acquire much larger 1,100 MW plants from China, including the two new reactors for Karachi.
China is the only country willing to supply Pakistan with nuclear plants, and Pakistan is China's sole market for nuclear exports, providing an outlet for China's hopes of selling its nuclear technology more widely.
"It is very difficult for the Pakistan government to get such a full package of support from any other place in the world," said Li Ning, an expert on China's nuclear industry at Xiamen University.
Ansar Parvez, chairman of the Pakistan Atomic Energy Commission, which builds and runs the country's nuclear power plants, said that the country's aim is to generate 8,800 MW of nuclear power by 2030.
"When we're talking to the Chinese, we're discussing how to get to 8,800 MW by 2030," said Mr. Parvez. "We'll continue talking to them until we meet the 2030 target."
That target requires Pakistan to build six to seven large nuclear power plants, including the two already scheduled for Karachi. Each such plant costs $4 billion to $4.5 billion, said Mr. Parvez.
China's Foreign Ministry didn't respond to a written request for comment on the latest negotiations, nor did state-owned China National Nuclear Corp., which has sold reactors to Pakistan previously.
A spokeswoman for China's Foreign Ministry, Hua Chunying, defended the countries' nuclear cooperation in December, which she said was in accordance with the countries' international obligations.
"In the future, the Chinese side wishes to continue offering help to the best of its ability to resolve the electricity-shortage issue," Ms. Hua had said