Rolls-Royce, Balfour Beatty Unveil Areva Nuclear Deals

By Jonathan Buck
Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--Rolls-Royce Group PLC (RR.LN) and Balfour Beatty Group PLC (BBY.LN) Thursday separately announced deals with French nuclear power plant and services provider Areva (CEI.FR).
Rolls-Royce, best known as a maker of jet engines but also a key provider of power systems and services to the energy industry, said it had agreed a memorandum of understanding to work with Areva on programs that will see the first new nuclear reactors built in the U.K. for over 20 years.
The agreement covers supply chain development, manufacturing and engineering services.
Rolls-Royce didn't provide an estimate of how much income it expects the agreement to generate, but noted the civil nuclear market is currently worth around GBP30 billion a year globally and is expected to grow to GBP50 billion a year in 15 years time, more than 70% of which will relate to the build and support of new facilities.
It is estimated that the nuclear program in the U.K. will sustain 10,000 to 15,000 jobs over 25 years, of which 45% will be engineers, Rolls-Royce added. The company says it has the largest nuclear skills base of any U.K. company, with around 2,000 employees in the U.K., the U.S. and France.
Mike O'Brien, minister at the Department of Energy and Climate Change, said the agreement "represents a vote of confidence by Areva in the U.K. new nuclear market and a vote of confidence in the U.K. supply chain."
Construction company Balfour Beatty said it is partnering with Areva to ensure effective delivery of third-generation nuclear evolutionary power reactors in the U.K.
Balfour Beatty, which previously has worked on nuclear facilities at sites including Sellafield, Sizewell B, Hunterston and Torness, said it will team up with Areva to identify the skills and resources required to deliver a fleet of evolutionary power reactors and to put an effective supply chain in place.
Site construction of the first reactors could start as early as 2013.
Balfour Beatty also announced it has also formed a joint venture with Vinci Construction, a unit of French construction and concessions group Vinci SA 912548.FR), to help deliver project management, construction and civil engineering infrastructure for the evolutionary power reactors program in the U.K.
At 0805 GMT, Balfour Beatty shares were up 0.9% or 3 pence at 306p, while Rolls-Royce shares were flat at 281p. Company Web sites: www.rolls-royce.com
www.balfourbeatty.com
-By Jonathan Buck, Dow Jones Newswires; +44 207 842 9237; jonathan.buck@dowjones.com