Areva launches at Newport News

A facility known for world class ship building will now also be manufacturing components for commercial nuclear reactors

AREVA and Northrop Grumman Shipbuilding, a sector of Northrop Grumman Corporation (NYSE:NOC), have joined forces to build a new nuclear manufacturing and engineering facility in Newport News, Va.

The joint venture will manufacture heavy components for the U.S. EPR, AREVA's Generation III+ nuclear reactor.

The 300,000 square-foot facility represents an investment of more than $360 million and will bring more than 500 jobs to Virginia. AREVA Newport News will be the first full-scale manufacturing facility dedicated to supply heavy components, such as reactor vessels, steam generators and pressurizers to the U.S. nuclear energy industry.

These components will supply the first new U.S. nuclear power plants to be built in 35 years. Industry experts have viewed limited production of heavy components positioned against rising demand as a constraint on nuclear energy's expansion. Not any more.

Groundbreaking brings out top brass

Plenty of people are excited about the announcement which gives the entire U.S. nuclear energy industry a lift. Just about every elected official in Virginia, including Gov. Tom Kaine, who could find a reason to show up for the ground breaking ceremony did so.

The event also brought out the top brass from Areva. This is the second major announcement for the French state-owned company in America in as many months. In June Areva announced it would build a 1,600 MW EPR reactor for Duke Power at Piketon, OH.

Ground breaking ceremonies are flashy events and the Virginia Business News even added a fashion statement to the media coverage.

Wearing a beige suit, Anne Lauvergeon (right) stood out from the group of men wielding the silver shovels.

“We intend to build a lot of new reactors in the U. S. We believe in the North American markets and the workforce,” she said.

The more than 500 skilled manufacturing jobs that will eventually be created by the plant will go to American workers and not overseas, she said to applause.

In a prepared statement, Lauvergeon said . . .

"AREVA Newport News is powerful evidence of the reality of the U.S. nuclear energy resurgence and our commitment to it. AREVA intends to build one-third of all new reactors around the world and at least seven in the United States.

It is also significant that Northrop Grumman's Shipbuilding sector brings its heavy industrial engineering and manufacturing expertise required to build U.S. Navy nuclear ships to the venture. Along with its skilled workforce, Northrop Grumman has existing transportation access via the James River to deliver heavy components.

And there’s more . . . I like this one . . .

"The nuclear power industry is bringing back 'made in America'," said Tom Christopher, CEO of AREVA Inc., the group's North American division.

"In addition to our joint venture with Northrop Grumman, we are working with Lehigh Heavy Forge in Bethlehem, Pa., to produce qualified forgings for the U.S. EPR.

"This agreement is the result of several years of effort by both the AREVA and Northrop Grumman teams," said Dan Arczynski, Vice President for Strategy, Northrop Grumman Shipbuilding. "

Calvert Cliffs is first up

The Newport News plant is expected to be in production mode by 2012. One of the first nuclear reactor projects it will support is Calvert Cliffs III. In a separate development, AREVA and its U.S. consortium partner Bechtel Power Corp announced they have signed a term sheet with Baltimore-based UniStar Nuclear Energy (NYSE:CEG) outlining terms and conditions for an engineering, procurement and construction (EPC) contract for UniStar's proposed Calvert Cliffs 3 nuclear energy facility project in Maryland. The EPC term sheet agreement is a critical step in negotiating an overall EPC contract.

"This is a major milestone that continues the momentum toward realizing the first EPR™ nuclear energy facility to be built in the United States and acknowledges the quality of AREVA's offering," said Mike Rencheck, President of AREVA NP Inc. (right).

The EPC contract for Calvert Cliffs 3 is planned to be the first in a series of standardized EPC contracts for a fleet of U.S. EPR facilities that will be licensed, developed and constructed as part of the UniStar Nuclear Energy business model.

Update 07/22/09

A spokesman for Areva later corrected one fact. He said that the primary parts for Calvert Cliffs will come from the firm's Chalon/St. Marcel plant in France. The first components from AREVA Newport News are slated for the firm's second U.S. EPR reactor, most likely at Nine Mile Point in upstate New York or PPL’s proposed Bell Bend plant in Pennsylvania.

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