UAE to build nuclear reactors

France will sign a framework agreement on nuclear power with the UAE during a visit by French President Nicolas Sarkozy on Tuesday, Sarkozy's office said on Friday.

"This will be the third accord with the Arab world in this sector after Libya and Algeria. This is a contract that encompasses the development and use of civilian nuclear energy," Sarkozy's office said .

Sources close to the situation had earlier told Reuters that a cooperation agreement was expected to be signed when Sarkozy goes to Abu Dhabi on Tuesday, after a visit to Saudi Arabia on Sunday and Qatar on Monday.

UAE authorities deem it absurd to use oil to produce electricity when they can sell the commodity at close to $100 a barrel, and they have started negotiations with French groups such as nuclear reactor maker Areva , sources close to the situation told Reuters.

Areva Chief Executive Anne Lauvergeon is due to accompany Sarkozy during its Middle Eastern trip.

Areva is also set to sign a power transmission and distribution contract worth between 300 million euros and 500 million euros in Qatar, sources close to the situation said.

Gaz de France is also expected to sign a long-term natural gas contract with Qatar, sources said.

Total Chief Executive Christophe de Margerie will be among a group of French business leaders accompanying Sarkozy on his tour. (Reuters)