Megatons to Megawatts Program

The Megatons to Megawatts Program, successfully completed in December 2013, is the popular name given to the program which is also called the United States-Russia Highly Enriched Uranium Purchase Agreement. The official name of the program is the "Agreement between the Government of the Russian Federation and the Government of the United States of America Concerning the Disposition of Highly-Enriched Uranium Extracted from Nuclear Weapons", dated February 18, 1993. Under this Agreement Russia agreed to supply the United States with low-enriched uranium (LEU), obtained from high- enriched uranium (HEU) found to be in excess of Russian defense purposes. The United States agreed to purchase the low enriched uranium fuel.

The original proposal for this program was made by Thomas Neff, a physicist at MIT, in an October 24, 1991 Op-Ed in the New York Times. On August 28, 1992, in Moscow, U.S. and Russian negotiators initialed the 20-year agreement and President George H. W. Bush announced the agreement on August 31, 1992. In 1993 the agreement was signed and initiated by President Clinton in 1993 and the commercial implementing contract was then signed by both parties.

Under this Agreement, United States and Russia agreed to commercially implement a 20-year program to convert 500 metric tons of HEU (uranium 235 enriched to 90 percent) taken from Soviet era warheads, into LEU, low enriched uranium (less than 5 percent uranium 235).The terms of the agreement required that it be implemented on commercial terms without government funds. The agreement named the Department of Energy as the executive agent for the U.S. side. The DOE appointed the newly privatized United States Enrichment Corporation (USEC) as the commercial agent, its executive program contractor. The Russian Federation designated Techsnabexport (TENEX) a commercial subsidiary of its Ministry for Atomic Energy (Minatom), as the agent to implement the program on commercial terms. On January 14, 1994, the commercial contract between USEC and TENEX (HEU-LEU Contract) was signed. The terms also required that the HEU be converted by dilution (downblending) to LEU in Russian nuclear facilities. USEC would then purchase the low enriched fuel and transport it to its facilities in the USA. The first shipment of LEU took place in May 1995.

The value of the process is in two components: the LEU Feed (feed component of natural uranium) and the work involved in the conversion process, measured as separative work units (SWU). Both have separate commercial values. Early disagreements on interpretations of the terms of the governmental and commercial agreements on this issue led to controversy and some delays. Although each shipment contains LEU, the commercial nature of the global uranium market defines the uranium and the enrichment components as separate commercial values and costs.The solution reached was for USEC to continue payments for the SWU component it purchased and also to transfer the equivalent of the LEU feed component to the Russian side. In March 1999 Minatom and the U.S. Department of Energy signed the Agreement Concerning the Transfer of Source Material to the Russian Federation (the Transfer Agreement)and at the same time TENEX signed a Contract with a Group of Western Companies (Cameco, Canada; Cogema, France; Nukem, Germany/USA) regarding the purchase of the LEU Feed. As years passed, numerous commercial contract terms were renegotiated and revised to accommodate mutual interests.

...
Wikipedia