By Timothy Gardner
WASHINGTON (Reuters) - The United States is close to working with Saudi Arabia on building nuclear power reactors, but talks on tough non-proliferation standards with the kingdom remain a challenge, U.S. Energy Secretary Rick Perry said on Wednesday.
Perry has held talks with several Saudi leaders this year, including King Salman and Crown Prince Mohammed bin Salman, on the kingdom's ambition of initially building two nuclear power stations. Saudi Arabia wants to ultimately construct 16 reactors in coming decades at a cost of about $80 billion (61 billion pounds).
Discussions had been held up on Saudi Arabia's desire to relax nonproliferation standards and potentially allow the country to enrich uranium and reprocess plutonium, technologies that non-proliferation advocates worry could one day be covertly altered to produce fissile material for nuclear weapons.
Perry said progress on non-proliferation standards had been made, but that talks were not going as quickly as either side would have hoped. Perry has shared with Saudi leaders that being "perceived as very, very strong on non-proliferation was a most important message, globally," he told reporters at the Energy Department headquarters.
Perry said part of the talks centre on making sure any nuclear inspections would not be intrusive for sensitive areas in the kingdom.
In July, South Korea said its state-run utility KEPCO along with the United States, France, China and Russia had been shortlisted to bid for a nuclear power project in Saudi Arabia and that the winner would likely be selected in 2019.
Washington hopes Saudi Arabia will buy nuclear power technology from U.S. companies, including Westinghouse, which recently emerged from Chapter 11 bankruptcy and abandoned plans to build two advanced AP1000 reactors in the United States.
If Saudi Arabia signs a deal that relaxes the safeguards, the United Arab Emirates could be free to break a deal it signed with Washington years ago and enrich uranium. The UAE deal contained the "gold standard" in such 123 nuclear agreements, because it contained safeguards against enriching and preprocessing.
Westinghouse said it would defer to the customer, Saudi Arabia, for comment. The Saudi embassy in Washington did not immediately respond to a request for comment.
(Reporting by Timothy Gardner; Editing by Joseph Radford)