Russia won a tender in December 2003 to supply nuclear fuel to all the four operating power units in Slovakia until 2010 under a $200-million contract.
"Russia is not only a fuel supplier to Slovakia but it is also willing to help modernize its nuclear power facilities," Vladimir Putin told Robert Fico during broad-format negotiations at his residence near Moscow.
Slovakia has two power plants with six units, including four designed by Soviet experts. Two units generate power at the Bohunice plant in the west of the country. Another two units operate at the Mochovce plant in the south, and the third and fourth units of the plant are to be commissioned by 2012.
During his Russian visit last November, Slovakia's Economy Minister Lubomir Jahnatek said his country was ready to set up a consortium with Russia to complete the third and fourth units at Mochovce.
"But that plant does not belong to Slovakia, as 66% is controlled by an Italian company, and the decision will be up to it," the minister said in a reference to Italy's utility ENEL, which acquired 66% in the Mochovce power plant almost a year ago.
As for the Bohunice plant, Jahnatek favored the idea of forming a consortium of Russian and European companies to modernize the plant. "We want Russian contractors to have high chances," he said.
Both Putin and Fico agreed that energy is the area of the most intensive bilateral cooperation, which, apart from nuclear power, includes gas and oil.
Russian natural gas giant Gazprom [RTS: GAZP], which covers 100% of Slovakia's gas imports, signed a deal with gas concern Slovensky Plynarensky Priemysel (SPP) in 1997 until 2008, with the gas price at $180 per 1,000 cubic meters in 2005.
Fico expressed the hope that SPP would be able to sign "a good contract" in 2009 as the current deal expires in 2008. "The price for gas largely determines the socioeconomic situation in the country," Fico said.
Slovakia, which enjoys discounted gas price rates as a transit nation for Russian natural gas, fears that possible gas price hikes could complicate the government's efforts to maintain low inflation, which is the major condition for entering the euro zone in 2009.
Gazprom also holds a 49% stake in SPP together with Ruhrgas and Gaz de France, and controls 50% of Slovakia's Slovrusgaz.
"As for oil, Slovakia imports 98% of it from Russia, and the situation here is better because the contract expires only in 2014," Fico said, adding that the two countries were looking into further cooperation opportunities in energy transit.
Slovakia is the second transit nation for Russian energy exports to Europe after Ukraine, pumping Russian oil through the Druzhba pipeline. "Russia supplies Slovakia with hydrocarbons. Your country is an important transit nation, and our businesses are considering broader cooperation in the area," Putin said.
European consumers have expressed serious concerns about the reliability of Russian energy exports after Moscow's pricing spats with Belarus, another transit country, early this year and with Ukraine last year. The tensions led to shortfalls in Europe, including Slovakia.
But the Slovak premier moved to defend Russia, saying: "I want to reiterate my conviction, which I expressed at the time of [transit] problems with Belarus: we believe that Russia is a reliable and promising partner in terms of energy supplies," Fico said.
