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DE RUEHTA #2316/01 3291018
ZNR UUUUU ZZH
R 241018Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3919
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UNCLAS SECTION 01 OF 02 ASTANA 002316 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: PARM PGOV PREL ENRG MNUC KNNP TRGY UK KZ
SUBJECT: ENCOURAGING KAZAKHSTAN TO MEET ITS BN-350 SPENT 
FUEL TRANSFER FUNDING REQUIREMENTS 
 
REF: A. STATE 89507 
     ¶B. ASTANA 02298 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (U) This is an action request.  Please see paragraph 
nine. 
 
¶3.  (SBU) SUMMARY:  In the 1997 agreement, &Implementing 
Arrangements between the Department of Energy of the United 
States of America and the Ministry of Sciences ) Academy of 
Sciences of the Republic of Kazakhstan Concerning Long-term 
Disposition of BN-350 Nuclear Material,8 the government of 
Kazakhstan committed to funding the transfer of BN-350 spent 
fuel.  On November 12, the U.S. Department of Energy/National 
Nuclear Security Administration (DOE/NNSA) stated that the 
fiscal year 2009 budget request for DOE,s contractor in 
Kazakhstan was denied by the government of Kazakhstan. 
DOE/NNSA requested assistance in urging the Kazakshtani 
government to meet its 1997 commitments by funding this 
budget request.  In September, per the instructions in reftel 
A, post delivered letters from then-Ambassador Ordway to the 
Minister of Energy and Mineral Resources and to Prime 
Minister Masimov urging the government of Kazakhstan to 
provide extra-budgetary funding to transport BN-350 spent 
fuel.  The Kazakhstani government has stated they will not 
contribute additional funds for this project.  The U.S. 
Department of Energy,s contractor for the U.S. 
government-funded sodium processing facility, which processes 
contaminated sodium from the BN-350 reactor, also requested 
assistance in seeking budgetary support from the government 
of Kazakhstan (reftel B).  Post requests detailed guidance on 
encouraging the government of Kazakhstan to meet its various 
BN-350 funding commitments.  END SUMMARY. 
 
REGULAR BUDGETARY FUNDING REQUEST FOR BN-350 SPENT FUEL 
TRANSFER DENIED 
 
¶4.  (SBU) In article two, paragraph three of the 
&Implementing Arrangement Between the Department of Energy 
of the United States of America and the Ministry of Science 
) Academy of Sciences of the Republic of Kazakhstan 
Concerning Long-Term Disposition of BN-350 Nuclear 
Material,8 signed on November 18, 1997, the government of 
Kazakhstan agreed to provide financial and logistical support 
for the transfer of spent fuel from the site of the BN-350 
reactor in Aktau to the designated fuel storage site of 
Baikal I in Semipalatinsk.  Kazakhstan,s Ministry of Energy 
and Mineral Resources (MEMR) has subsequently taken 
responsibility for implementation of the BN-350 Spent Fuel 
Program.  DOE/NNSA,s current contractor in Kazakhstan is the 
Kazakhstan Atomic Energy Company (KATEP).  On November 12, 
DOE/NNSA reported that KATEP,s fiscal year 2009 budget 
request for the BN-350 Spent Fuel Project was denied by the 
government of Kazakhstan.  KATEP,s Vice President, Alexander 
Baldov, stated that KATEP and Kazatomprom are working 
together to prepare a proposal for funding from an 
alternative source, and DOE/NNSA requested assistance in 
urging the government of Kazakhstan to follow through on its 
funding commitments. 
 
¶5.  (SBU) During NNSA,s last project meeting in Almaty in 
October, Baldov indicated that KATEP, working together with 
MAEC Kazatomprom and Kazakhstan,s National Nuclear Center 
(NNC) had developed the extensive documentation package that 
was needed by the government of Kazakhstan for funding 
consideration.  Baldov said meetings had been held with MEMR 
on GOK funding. KATEP originally requested approximately $25 
million in regular budgetary funding.  This amount included 
the $15 million necessary for the entire transport project, 
as well as $5 million for infrastructure upgrades, and $5 
million for physical protection services.  The minimum 
necessary to adhere to the current schedule for 2009 would be 
$5 million to provide physical protection support services 
 
ASTANA 00002316  002 OF 002 
 
 
and pave the road from the Kurchatov transfer station to the 
Baikal I storage facility to ensure a safe &dry-run8 and 
the first several &hot-fuel8 cask shipments.  To date, the 
U.S. government has spent over $150 million on the BN-350 
Spent Fuel Program, and every year the Kazakhstani government 
assured DOE/NNSA of its intention to honor its commitments to 
fund the BN-350 Spent Fuel transfer. 
 
¶6.  (SBU) The U.S. and Kazakhstan held their most recent 
high-level meeting on the BN-350 Spent Fuel Program on 
September 24 in Astana and on September 25 and 26 in Almaty. 
The September 24 meeting primarily discussed the reactor 
conversion project at the Institute of Nuclear Physics. 
Regarding the logistics of the BN-350 spent fuel transfer, 
Kazakhstani officials affirmed that all equipment necessary 
for transfer operations had been received and that the 
National Nuclear Center expected to complete the storage site 
at Baikal I on time.  The issue of regular budgetary funding 
for the BN-350 spent fuel program was not specifically 
discussed at the September 24 meeting. 
 
U.S. REQUESTS FOR SUPPLEMENTAL FUNDS TO SUPPORT TRANSFER OF 
BN-350 SPENT FUEL ALSO REPEATEDLY DENIED 
 
¶7.  (SBU) In September, per the instructions in reftel A, 
post delivered letters from then-Ambassador Ordway to the 
Minister of Energy and Mineral Resources and to Prime 
Minister Masimov urging the government of Kazakhstan to 
provide extra-budgetary funding to transport BN-350 spent 
fuel.  The Senior MEMR representative at the September 24 
meeting, Almaz Tulebayev, Director of the Department of 
Nuclear Power and Industry, confirmed that the letters had 
been received, and that MEMR was carefully considering the 
request.  However, Tulebayev also stated that MEMR,s budget 
had already been sent to Parliament, and it was unlikely that 
the funding requested in the letters could be obtained. 
Mynbayev made a similar response during his discussion with 
then-Ambassador Ordway on September 8. 
 
NORMAL BUDGETARY FUNDING FOR SODIUM PROCESSING FACILITY 
MAINTENANCE AT BN-350 ALSO DENIED 
 
¶8.  (SBU) Funding for all projects related to BN-350 appears 
to be limited for fiscal year 2009.  On November 5, U.S. and 
Kazakhstani officials met in Aktau to celebrate the 
completion of the $3.35 million U.S. government-funded sodium 
processing facility.  The Kazakhstani government committed to 
fund maintenance of the facility after construction was 
completed.  However, on November 5, representatives from 
Kazakhstan,s MEMR, Kazatomprom, and MAEC-Kazatomprom 
informed U.S. officials that MAEC,s budget request had been 
denied.  Instead MAEC received limited &plan of priority 
measures8 funding.  The contractor in charge of building the 
facility, Kazakhstan,s National Nuclear Technology Safety 
Center (NTSC), requested U.S. government assistance to lobby 
seem more budgetary assistance for long-term maintenance 
requirements (reftel B). 
 
ASSISTANCE REQUESTED TO SECURE FUNDING FOR BN-350 SPENT FUEL 
TRANSFER 
 
¶9.  (SBU) ACTION REQUEST:  DOE/NNSA, KATEP AND NTSC have made 
three separate requests for U.S. assistance in encouraging 
the government of Kazakhstan to fund BN-350 projects.  Post 
requests detailed instructions from Washington, concerning 
all funding commitments by the Government of Kazakhstan which 
have been documented in writing, and requests specific 
instructions on how much, and for what purposes, funding is 
to be requested from the government of Kazakhstan.  END 
ACTION REQUEST. 
HOAGLAND