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Toshiba and CB&I Agree to Terminate Agreements on South Texas Project Units 3 &4 and Global Strategic Partnership in ABWR

11 May, 2016

TOKYO-Toshiba Corporation (TOKYO: 6502) today announced that it has reached agreement with America’s CB&I on the termination of a series of agreements related to the development and execution of an engineering, procurement and construction (EPC) contract for South Texas Project Units 3 & 4 (STP 3/4), and on a global strategic partnership to promote Toshiba’s ABWR. Simultaneously, Toshiba America Nuclear Energy (TANE), a wholly-owned US-based Toshiba subsidiary, CB&I, and Nuclear Innovation North America (NINA), the owner of STP 3/4, also agreed that CB&I will be relieved from any further obligations related to STP 3/4, and that any security interest or lien granted to CB&I has been terminated and released.

In 2010, the Shaw Group Inc., now a subsidiary of CB&I*1, entered into a global strategic alliance with Toshiba to promote Toshiba’s new Advanced Boiling Water Reactor (ABWR) nuclear power plant design in markets worldwide, excluding Japan and Vietnam. Shaw agreed, while stipulating certain conditions, to join Toshiba in investing in the ABWR promotion alliance, including STP. As a member of a consortium with TANE, Shaw took on the role of EPC contractor for STP 3/4, a project to build two ABWR.

In December 2015, Westinghouse Electric Company, LLC, a Toshiba Group company, agreed to acquire CB&I Stone & Webster Inc., a unit of CB&I, and as a result Toshiba recognizes that CB&I’s business strategy is now focused on sectors other than nuclear new build projects. The agreement announced today aligns with this recognition. Toshiba further understands that an agreement with CB&I that terminates and releases any security interest or lien granted to CB&I will improve the STP investment environment for future investors.

Because of current economic drivers in Texas and other related issues, Toshiba understands that NINA does not plan to immediately commence construction of STP 3&4.As agreed between CB&I and TANE, TANE now becomes the sole EPC contractor of STP 3/4, TANE will select an architect engineering company pursuant to the EPC contract as market conditions recover, and NINA is ready to commence the construction of the project. The United States Nuclear Regulatory Commission granted Combined Licenses (COLs) for STP 3/4 in February 2016 and Toshiba continues to consider STP 3/4 an important project.

Toshiba and CB&I have developed a longstanding relationship, and CB&I will continue to be an important partner of Toshiba in areas including the thermal power business.

Note:
[*1]
Shaw and its affiliate, Stone & Webster, was acquired by CB&I in 2013. Subsequently, Westinghouse acquired CB&I Stone & Webster Inc. in December 2015.

 

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