December 23, 2011 / 8:32 AM / 8 years ago

UPDATE 1-Hitachi signs interim deal for Lithuania nuclear plant

* Final agreement expected in 2012

* Hitachi-GE Nuclear Energy to supply ABWR reactor (Adds details, background)

VILNIUS, Dec 23 (Reuters) - Japan’s Hitachi signed a preliminary deal with the Lithuanian government on Friday to build a nuclear power plant in the Baltic state, with the final agreement expected in 2012, officials said.

Lithuania wants to build an new nuclear power plant by 2020 to cut energy dependence on Russia, the sole gas supplier, with Japan-U.S. joint venture Hitachi-GE Nuclear Energy, supplying a 1,300 megawatts advanced boiling water reactor (ABWR).

“Today we reached an important interim result in the negotiations - we signed the main principles of the concession agreement...,” Lithuanian Prime Minister Andrius Kubilius told journalists after the signing.

Lithuanian officials declined to reveal details, citing a confidentiality clause, but sources involved in talks said earlier the agreement was expected to include Hitachi’s commitments to invest in the new plant.

“We believe that it is... an opportunity for Hitachi to contribute to the energy stability in the Baltic region,” Masaharu Hanyu, Vice President and Executive Officer of Hitachi, Japan’s biggest industrial electronics firm, added.

He declined to take questions.

Baltic states Latvia and Estonia will also invest in the project. Poland’s top utility PGE suspended participation in December, citing unacceptable conditions.

“We will work on the final deal with our regional partners, and hope the parliament approves it in spring next year,” Kubilius said.

Each partner is expected to get a share of electricity generated at a new plant depending on their investment.

Lithuania will have at least a 34 percent stake in the new plant, estimated to cost less than 5 billion euros ($6.5 billion).

Lithuania’s government expects the construction of the new plant to start in 2014 for it to be operational by 2020. ($1 = 0.7654 euros) (Reporting by Nerijus Adomaitis; Editing by Hans-Juergen Peters)

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