$USU. In March 2011, USEC signed a multi-year supply contract with Techsnabexport (TENEX) of Russia to replace the low enriched uranium fuel supply that will no longer be available to USEC once the Megatons-to-Megawatts™ program concludes at the end of 2013. The contract took effect in December 2011
The new contract will assure USEC’s continued access to this important source of supply of low enriched uranium fuel for its customers during a transition period as USEC builds out its American Centrifuge Plant in southern Ohio and looks to extend operations of the Paducah Gaseous Diffusion Plan in Kentucky.
This contract complements those on-going activities and is mutually beneficial to USEC and TENEX. It helps USEC meet customer commitments, continues USEC’s long-standing supply relationship with TENEX, and strengthens USEC’s financial position as it moves forward with the American Centrifuge.
Deal Terms
The Transitional Supply Contract is a multi-year contract to purchase about 21 million separative work units (SWU) through 2022 with a mutual option to purchase up to another 25 million SWU during that period.
USEC will purchase the SWU contained in the low enriched uranium and deliver natural uranium to TENEX for the low enriched uranium’s uranium component.
The low enriched uranium supplied by TENEX will come from Russia’s commercial enrichment activities rather than from downblending of excess Russian highly enriched uranium.
The pricing terms for SWU under the contract are proprietary, but are based on a mix of market-related price points and other factors.
Feasibility Study for U.S. Enrichment Plant
USEC and TENEX expect to conduct a feasibility study to explore the possible deployment of an enrichment plant in the United States employing Russian gas centrifuge technology. As part of the feasibility study, ROSATOM, USEC and TENEX will review international agreements, government approvals, licensing, financing, market demand and commercial arrangements.
Any decision to proceed with such a project would depend on the results of the feasibility study and would be subject to further agreement between the parties and their respective governments. In any event, such a project would not be deployed until after completion of the American Centrifuge Plant. This initiative is part of USEC’s strategic approach in serving its customers in the uranium enrichment market.
The new contract will assure USEC’s continued access to this important source of supply of low enriched uranium fuel for its customers during a transition period as USEC builds out its American Centrifuge Plant in southern Ohio and looks to extend operations of the Paducah Gaseous Diffusion Plan in Kentucky.
This contract complements those on-going activities and is mutually beneficial to USEC and TENEX. It helps USEC meet customer commitments, continues USEC’s long-standing supply relationship with TENEX, and strengthens USEC’s financial position as it moves forward with the American Centrifuge.
Deal Terms
The Transitional Supply Contract is a multi-year contract to purchase about 21 million separative work units (SWU) through 2022 with a mutual option to purchase up to another 25 million SWU during that period.
USEC will purchase the SWU contained in the low enriched uranium and deliver natural uranium to TENEX for the low enriched uranium’s uranium component.
The low enriched uranium supplied by TENEX will come from Russia’s commercial enrichment activities rather than from downblending of excess Russian highly enriched uranium.
The pricing terms for SWU under the contract are proprietary, but are based on a mix of market-related price points and other factors.
Feasibility Study for U.S. Enrichment Plant
USEC and TENEX expect to conduct a feasibility study to explore the possible deployment of an enrichment plant in the United States employing Russian gas centrifuge technology. As part of the feasibility study, ROSATOM, USEC and TENEX will review international agreements, government approvals, licensing, financing, market demand and commercial arrangements.
Any decision to proceed with such a project would depend on the results of the feasibility study and would be subject to further agreement between the parties and their respective governments. In any event, such a project would not be deployed until after completion of the American Centrifuge Plant. This initiative is part of USEC’s strategic approach in serving its customers in the uranium enrichment market.
