Bulgaria to pick nuclear plant builder on Tuesday

By Tsvetelia Ilieva

SOFIA, Oct 30 (Reuters) - Bulgaria will award a building contract for a new 2,000 megawatt nuclear power plant worth up to an estimated 4 billion euros ($5.09 billion) on Tuesday, Energy Minister Rumen Ovcharov said.

The Balkan country must decide between Russian Atomstroyexport, in which gas giant Gazprom <GAZP.MM> has a 49 percent stake, and a Czech consortium, led by Skoda JS, owned by Gazprom-controlled OMZ <OMZZ.RTS>.

Bulgaria is building the new generator at the Danube river town of Belene so it can remain the leading power exporter in southeast Europe after it shuts down two 440 megawatt reactors by the end of the year due to EU entry in 2007.

"I expect the decision for Belene's builder to be announced tomorrow," Ovcharov said on the sidelines of an energy conference on Monday.

Ovcharov declined to name the winner, but Bulgarian media has quoted unnamed government sources saying the Black Sea country is heavily favouring the Russian company.

Bulgarian state utility NETC, which is handling the tender, said its board of directors would meet this afternoon to discuss the Belene project. It did not elaborate.

Analysts say Russia has pushed for the deal, using its influence as Bulgaria's main natural gas supplier and the key partner in a planned oil pipeline through the country to Greece.

The fact that Atomstroyexport teamed up with France's Areva <CEPFi.PA> and Germany's Siemens <SIEGn.DE> for the project would make it easier for Sofia to defend its choice to the European Union, which Bulgaria will join on Jan. 1, analysts said.

Atomstroyexport has offered to build two new 1,000 megawatt water pressurised reactors or build one new and use an already supplied one on the site.

The Czech group is working with Germany's Hochtief <HOTG.DE> and Westinghouse, the U.S arm of British Nuclear Fuels being bought by Japan's Toshiba Corp <6502.T>.

Bulgaria launched the construction of Belene in the 1980s and invested around $1 billion, but following environmental concerns and lack of financing it froze the project in 1991.

The Socialist-led government has decided to keep at least 51 percent in the new plant and participate and bring in a strategic investor to share in the plant's cost and operation.

It said the ownership and operator of the new plant will be decided once the builder is chosen.

So far Gazprom, Italy's Enel <ENEI.MI> and Czech CEZ <CEZPsp.PR> have expressed interest in investing in and operating the plant in northern Bulgaria. ((Reporting by Tsvetelia Ilieva, editing by Will Waterman; e-mail: Tsvetelia.Ilieva@reuters.com; tel:+ 359-2-939-97-31)) ($1=.7860 Euro)

Keywords: UTILITIES BULGARIA BELENE

Keywords: UTILITIES BULGARIA BELENE =2 SOFIA