STATE ATOMIC ENERGY CORPORATION “ROSATOM”

POWER EQUIPMENT SUPPLY & ENGINEERING: COOPERATION OPPORTUNITIES WITH & LOCALIZATION FRAMEWORK IN THE ROSATOM PROJECTS

“Atomex Asia” Forum

Nikita Mazein Director of International Business Department, Atomenergomash

November 19th, 2014 Ho Chi Minh City, Vietnam AGENDA

EQUIPMENT SUPPLY IN THE NPP VALUE CHAIN • 2 min

ATOMENERGIMASH: BUSINESS PROFILE & • 8 min PRODUCT PROFOLIO • 10 min ROSATOM’S LOCALIZATION EXPERIENCE &

FRAMEWORK

• Q&A SESSION

www.rosatom.ru 2 ROSATOM UNIQUE INTEGRATED NPP CONSTRUCTION SOLUTIONS

Energy Solution Modern NPP design (Gen III+) NPP construction and life cycle management support (fuel, services, modernization) Regulation, Operation & maintenance Infrastructure and Industrial Public acceptance Solution Creation and development of regulatory base NPP equipment manufacturing, service & works localization, NFC facilities construction, Technology transfer, SNF & RW management, Rosatom Certification of local suppliers, Social-political programmes support Integrated Solution participation in Rosatom third countries projects

Knowledge, skills, Financial human capital Solution

Personnel education & training (incl. BOO projects implementation; traineeship on NPP sites), State credits, R&D base development, Partnership projects NPP operation experience exchange

- basic principle

www.rosatom.ru 3 ROSATOM OFFERS COMPLETE INDUSTIRAL SOLUTIONS FROM URANIUM SUPPLIES TO NPP CONSTRUCTION OPERATION AND DECOMMISSIONING

Key Activities of Rosatom*

Fuel fabrication Mining Research and development TVEL Science & Innovation

ARMZ Conversion and enrichment TVEL Tenex Power equipment NPPs engineering and services & construction NIAEP-ASE Atomenergomash Atomproject Rusatom Service Gas centrifuges Gidropress OKBM manufacturing Spent TVEL fuel treatment Generation * Boxes include names of key Rosatom’s FCNRS, NUKEM subsidiaries in the Technologies relevant sector www.rosatom.ru 4 EQUIPMENT IS THE KEY SAFETY, EFFICIENCY & COST FACTOR

COST OF EQUIPMENT COMPRISES ABOUT 50% OF CAPEX

NSSS**

~10-15% Civil • Valves, pumps and piping (6%) construction & • Other equipment (5%) • Air cooling systems (3%) engineering* Other • Turbine and generator equipment (6%) Equipment • Electrical equipment (9%) ~50% • I&C (6%)

~35-40% - Cost of equipment

* Including design, project management, erection and commissioning works, training , etc. www.rosatom.ru **Nuclear steam supply system 5 POWER EQUIPMENT: UNIVERSAL COMPETENCES – MULTIPLE APPLICATIONS

DESIGN MANUFACTRUING INSTALLATION SERVICE

• Reactor vessel equipment • Steam generators (up to 1200 MW) • Turbine island equipment (up to 1200 MW) NUCLEAR POWER • Pumps (incl. main circulation pump) GENERATION • Transportation/lifting equipment EQUIPMENT • Control and measurement equipment • Auxiliary equipment • Equipment for NRW and SNF THERMAL POWER • Boilers, HRSG (up to 800 MW) GENERATION • Heat-exchangers EQUIPMENT • Auxiliary equipment

• Air-cooling units and reservoir EQUIPMENT FOR equipment OIL&GAS INDUSTRY • Auxiliary equipment

METALLURGICAL • Castings (up to 300 tones) and COMPONENTS forgings (up to 200 tones)

www.rosatom.ru 6 ATOMENERGOMASH CORPORATE PROFILE

Atomenergomash (AEM) is a leading power equipment company in Russia, supplying comprehensive solutions for nuclear, thermal power, gas and petrochemical industries

Power equipment manufacturing AEM’s equipment is installed at more than 13% of NPPs and engineering branch of and at about 2% of TPPs worldwide, including 40% of Rosatom State Corporation power plants in Russia and CIS

20% of Russian power generation equipment (PGE) industry

Comprising more than 50 manufacturing, engineering and R&D facilities in Russia, Ukraine, Czech Republic, Hungary

Employing a 24 000 skilled and professional workforce

order backlog exceeds $3 billion

Unique production capacity, strong research base and wide-ranging expertise are the basis for successful and sustainable development of AEM

www.rosatom.ru 7 KEY MANUFACTURING & ENGINEERING UNITS

Uniting enterprises of cutting-edge technological and production competences

Machine-Building Plant “ZiO-Podolsk” Volgodonsk-, branch of AEM-Tech One of the leading enterprises in Russia’s PGE industry with more The company specializes in manufacturing of the main VVER reactor than 90 years of history, specializing in production of heat-exchange plant equipment and of equipment for refineries, petrochemical and and pressure vessel equipment for nuclear and thermal power mining industries

Petrozavodskmash, branch of AEM-Tech Energomashspetsstal (Ukraine) The facility produces equipment for the nuclear, One of the leading enterprises producing large castings and forgings petrochemical and pulp & paper industry. of specialty steel grades for the power, shipbuilding and steel industries

Central Design Bureau of Machine Building Sverdlovsk Research Institute for Chemical Engineering One of the leading enterprises in Russia, creating special pump and A leading enterprise in the field of equipment and complex process material handling equipment for nuclear power systems for the radiochemical production, nuclear-fuel cycle, treatment and disposal of nuclear waste

ALSTOM Atomenergomash Arako (Czech Republic) The joint venture with Alstom in engineering and production The company produces valves for the nuclear and thermal of half-speed turbines and generator «Arabelle» with the power, chemical, petrochemical and natural gas industries output capacity of 1200-1700 MW for NPPs

OKBM Afrikantov OKB GIDROPRESS One of the leading design organizations of nuclear engineering Chief design bureau of VVER reactor unit technology – the in Russia, a major research and production center for mobile complex set of engineering, experimental research and medium & small scale nuclear reactors and Fast Breeder production works for nuclear power plants. Reactor technology

www.rosatom.ru 8 CORE PRODUCTS FOR NUCLEAR POWER PLANTS

1 Steam generator

2 Piping of emergency core cooling system, pressurizer system, planned and emergency cooling down system

3 Spray heat exchanger Moisture separator- 13 4 reheater

5 High-pressure heater 10 6 Turbine piping 9 5 7 7 Delivery water boiler 16 4 6 8 Heat exchangers 14 8 9 Turbine 17 12 10 Generator

11 1 11 Reactor pressure vessel 2 Pumps, main circulation 12 3 15 pump 13 High-voltage equipment

14 Valves

15 Cooling tower

16 Fuel handling machine

17 I&C www.rosatom.ru 9 VVER NSSS EQUIPMENT

www.rosatom.ru 10 ARABELLE™ HALF SPEED TURBINE TECHNOLOGY

Integrating Russian and European technologies to build new generation nuclear power plants – a Joint Venture with Alstom

49% 51%

ARABELLE™ Manufacture of 1200–1800 MW class turbines, generators and heat exchangers for nuclear applications

Supply of complete secondary loop packages for nuclear applications

Retrofit of turbine island equipment at nuclear power plants

Supply of emergency diesel generators for nuclear applications

After-sale service of turbine hall equipment at nuclear power plants

www.rosatom.ru 11 CORE SOLUTIONS FOR THERMAL POWER PLANTS

1 Boiler equipment

HRSGs Utility boilers Gas and air ducts Large-size welded structures

2 Heat-exchange equipment

1 1 Low pressure heaters High pressure heaters Delivery water heaters 4 Vessels and tanks Water-to-water heaters 3 6 Steam-water heaters 3 Permanent pipelines 2 Permanent pipelines 7 4 Water treatment Distilling and desalination plants 5 Deaerators

5 Cooling systems

Cooling systems, cooling towers

6 Auxiliary equipment

Piping Filters Pumps

Power Fans accessories

www.rosatom.ru 1212 PRODUCTS FOR OIL&GAS PROCESSING INDUSTRIES

HEAT EXCHANGERS REGENERATORS

COLUMNS FUEL GAS, START GAS AND IMPULSE GAS TREATMENT UNITS

VESSELS EQUIPMENT FOR GAS-MAIN PIPELINES

REACTOR EQUIPMENT COOLING TOWERS

TUBE FURNACES

VALVES STEAM GENERATORS

PIPELINE FITTINGS AIR COOLERS

PUMPING EQUIPMENT DUST COLLECTORS

www.rosatom.ru 1313 13 SOURCING AND LOCALIZATION SOLUTIONS FOR NPP EQUIPMENT

Complexity LOW MODERATE HIGH of equipment

Product Nuclear Steam Supply Turbine island equipment Ancillary and periphery System + ancillary equipment equipment (NSSS)

Technology Russian, local, third Russian or localized Russian countries (license)

Source from joint-ventures Rosatom’s own Sourcing & Source from local with Russian stake, manufacturing base, limited localization suppliers, localize within solution opportunities for opportunities for national industry localization exist localization

NPP construction Single NPP project NPP park construction scale factor

less < Critical technology for safety and/or know-how > more www.rosatom.ru 14 BASIC APPROACH ON LOCALIZATION OPTIONS IN NPP CONSTRUCTION PROJECTS

JV creation Intention and ability to share partnership License risk and develop joint business Advanced industrial cooperation with investment component and technological transfer Subcontract Initial stage of interaction establishment, “building confidence” Inclusion in E-Catalogue of Rosatom suppliers www.rosatom.ru 15 AREAS OF COOPERATION WITH FOREIGN PARTNERS THROUGHOUT THE VALUE CHAIN

Design and Components and Equipment System Service and engineering parts manufacturing integration/supply modernization

Scope of production-and- Technological/Strategic technological cooperation partnership (extension of and interaction between cooperation/integration AEM and suppliers areas and product range)

Joint equipment supplies - Through participation in share capital, management and for power projects production (including engineering, production cooperation, certification, licensing, etc.)

- On contractual terms Procurement of materials - Commercial arrangements for the final product manufacturing (electrical, piping, valves, I&C, BOP)

Level of complexity of - On contractual terms organizational forms

AEM is willing to explore various forms of cooperation with suppliers depending on commercial and strategic interest www.rosatom.ru 16 BENEFITS OF LOCALIZATION

Savings from local deliveries Improved chances to win Revenue generation NPP construction contract Local Technology transfer Rosatom Development of base for Suppliers Profits safe operation of new NPP Diversification of supplies

Higher taxes from salaries & company profits Local Authorities Higher employment Improved GDP per capita Multiplication effects

Rosatom localization solutions are based on Win-Win principle in order to support local economy through involvement of local suppliers into nuclear programme

www.rosatom.ru 17

ROSATOM’S EXPERIENCE IN EQUIPMENT PRODUCTION AND

SERVICES LOCALIZATION & SOURCING: SUCCESS STORIES

LOVIISA TEMELIN KUDANKULAM Proposal for

Finland Czech Republic India Temelin NPP 3,4

2000

2011

1980

2012

- -

- based on VVER- 0 First global sourcing In implementation of this 1200 design

project. Became 1980 Significant local 2002 197 project first full scope known as localization approach content sourcing, Strong involvement of “Eastinghouse”, was fulfilled. especially in civil European contractors. where Siemens and Within the scope of construction. European investors Westinghouse were Council for Mutual Broad localization participation is attracted by Russian Economic Assistance program is envisaged. envisaged. Rosatom is organizations. nuclear equipment stake holder and production was financing partner in the Is considered to be developed in Czech project. one of the most Republic, Slovakia, effective NPPs in the Poland, … world.

Local supplier’s share in equipment and services supply

Up to 20% 30% 39% 70%

www.rosatom.ru 18 SUCCESSFUL LOCALIZATION OF NUCLEAR PROGRAM BY USSR IN CENTRAL-ESATERN EUROPE

Czech Republic is preparing tender for 2 nuclear units and requires comprehensive involvement of its suppliers into the project Agreement on the Multilateral International Specialization and Production Co-Operation and Mutual Supplies of Equipment for Nuclear Power Plants for the Period of 1981 – 1990

Under the Agreement, the Soviet Union carried out the transfer of working drawings, production technology, consulting and providing concrete assistance in solving issues arising in the process of manufacturing of the equipment, including supply of spare Soviet Union parts. Deliveries were realized from:

People's Republic of Bulgaria Biosecurity, capacitors, axial and artesian pumps

German Democratic Republic Overhead travelling cranes, transport and technological equipment

Czechoslovak Socialist Reactor plants, steam turbines, steam generators, pipelines of the big Republic diameter

Socialist Federal Overhead travelling cranes, nutritious and special pumps, the equipment of Republic of Yugoslavia the multiple forced circulation circuit and drum-separators for NPP with RBMK reactors

www.rosatom.ru 19 EXAMPLE OF LOCALIZATION PROGRAM IN CZECH REPUBLIC: CURRENT LOCAL SUPPLY CHAIN

Possible Suppliers are influential and system-creative players in Czech Power industry

High and Low pressure I&C: Pressurizer: Steam generators: heat exchangers: I&C Energo VITKOVICE PE VÍTKOVICE PE VÍTKOVICE PE ZAT, ENVINET and CHEMCOMEX

Pressure vessels: Electrical systems: SKODA JS I&C Energo Engineering Auxiliary prime and Polar crane: secondary systems: SKODA JS KP RIA, ČKD, partially Labs CHEMCOMEX

I&C Lab equipment and tools: ENVINET

Cooling tower: Valves: Chladici veze Praha Arako, MPOWER Civil Vent and air Engineering, Vent and air Civil structure: conditioning MODRANY POWER conditioning: Pumps:Pumps Metrostav ZVVZ Enven- SIGMA GROUP PSG Engineering Hochtief

Local companies could have 70% of total Temelin-3,4 supplies

www.rosatom.ru 20 ATOMENERGOMASH: POTENTIAL FOR COOPERATION

Target products Target regions

Pumping equipment

Piping & valves

Material handling equipment Europe

Water treatment

Captive power supply solutions MENA Asia Air-cooling equipment

General industrial applicationGeneral Electrical equipment Latin America Sub-Saharan Automated Control and Africa Measurement

Turbine hall equipment

Radioactive waste/spent fuel solutions

Nuclear powerNuclear Potential scope of equipment markets for nuclear Steam boilers & HRSG and thermal power, oil & gas and alternative energy sectors leads to the necessity of developing Pressure columns for oil&gas

commercial, strategic and technological

Heat exchangers for thermal partnerships

power / / power oil&gas Thermal power & petrochemical

www.rosatom.ru 21 Thank You for Attention!

Nikita Mazein Director of International Business Department, Atomenergomash

E-mail: [email protected] Phone: +7 (495) 668-20-93, ext. 1408

www.rosatom.ru