TOKYO, December 26 (RIA Novosti) - Japanese companies are set for cooperation with the Kazakh government to launch nuclear fuel production in Kazakhstan in 2010, the Japanese economics ministry said on Wednesday.

The Ministry of Economy, Trade and Industry said Kansai Electric Power Company and trading company Sumitomo Corporation were expected to sign a long-term agreement on the project with Kazakh state-run Kazatomprom in Astana, the former Kazakh capital, on Wednesday.

Experts attribute the companies' plans for a contract with the Central Asian country, which possesses at least a quarter of the world's uranium, to the need to diverse energy sources in the face of soaring world oil prices.

The Japanese partners are to provide technology and overhaul a Soviet-era nuclear processing plant in the Central Asian country.

The companies are set to allocate 70-80 billion yen (some $750 million) for the project, and the ministry said investment in expanding uranium production could reach several hundred billion yen, or several billion dollars.

Nuclear power makes up 30% of Japan's energy output, and the country intends to raise the figure to 40% by 2030, making nuclear power its key energy source.