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UPDATE 1-Aecon-SNC joint venture wins Darlington nuke contract
March 1, 2012 / 6:11 PM / 6 years ago

UPDATE 1-Aecon-SNC joint venture wins Darlington nuke contract

* Work at power station to begin this year

* First phase to generate C$600 mln in revenue

* Second phase revenue not determined

* Aecon shares up 4.6 pct, SNC shares climb 5.3 pct (Adds detail, stock prices)

March 1 (Reuters) - Construction company Aecon Group Inc and joint venture partner SNC-Lavalin Group , which bought the Canadian government’s commercial nuclear business in October, have won a project to refurbish all four reactors at Ontario’s Darlington Generating Station.

The first phase of the contract with Ontario Power Generation (OPG) is to run from 2012 to 2016 and provide C$600 million ($609 million) in revenue for the joint venture, of which more than C$100 million will go to Aecon.

Revenue in the second phase, which will extend from 2016 to 2023, has not yet been determined.

The four-unit Darlington station has a total output of 3,512 megawatts and is located about 70 km (45 miles) east of Toronto. According to OPG it provides about 20 per cent of Ontario’s electricity needs, enough to serve a city of two million people.

In the first phase of the contract, a full-scale reactor mock-up will be built to simulate and test the refurbishment, and specialized tools will be developed. The joint venture will develop a schedule and budget for the work and procure reactor components for the first unit to be refurbished.

In the second phase, the four reactor cores will be refurbished on a sequential basis with costs and profit equally shared by both companies.

Aecon will mainly provide construction and fabrication services to the joint venture, with SNC focusing on specialty tooling and engineering. Both will provide project management and procurement services.

The two companies have partnered on previous nuclear projects, said Aecon chief executive John Beck.

Last October, SNC bought Atomic Energy of Canada’s commercial Candu unit from the federal government. The unit designs and builds reactors for power stations.

The government sold the unit after years of subsidies and a poor performance. It retained ownership of the AECL research business in Chalk River, Ontario, which produces medical isotopes.

Shares of Aecon were up 4.6 percent at C$12.26 on the Toronto Stock Exchange on Thursday afternoon, while SNC shares jumped 5.3 percent to C$39.37.

$1=$0.99 Canadian Reporting By Susan Taylor; editing by Rob Wilson

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