Slovakia extends nuclear fuel deal with Russia

                                
 * Gas company SPP says drops suit against Gazprom
                                
 * SPP agrees a temporary cut in gas supplies
                                
 
                                
 By Martin Santa
                                
 BRATISLAVA, April 7 (Reuters) - Slovakia extended a contract
for nuclear fuel deliveries with Russia on Wednesday and dropped
an arbitration suit against Gazprom <GAZP.MM> in a sign of
improving relations between the two countries.
                                
 The euro zone member's dominant power company Slovenske
Elektrarne (SE), a unit of Italy's utility Enel <ENEI.MI>, said
in a statement the agreement with Russia's TVEL, for two new
units at Mochove power plant, covered the 2012-2017 period.
                                
 The company declined to comment on deal's value.
                                
 The agreement was concluded during a visit by Russian
President Dmitry Medvedev to Bratislava, his first trip to the
central European euro zone member country.
                                
 SE plans to complete its third unit at the country's newest
nuclear site in Mochovce by 2012 and the fourth unit in early
2013, each with 440 MW output. The first two units were
connected to the grid in 1998 and 1999 respectively.
                                
 Russia is the sole supplier to Mochovce and the second
Slovak nuclear plant at Jaslovske Bohunice.
                                
 The main Slovak gas company SPP separately announced it had
dropped a suit against Russia's Gazprom over an interruption of
gas supplies amid a price row between Russia and Ukraine in
early 2009, which led to shortages across eastern Europe.
                                
 SPP, managed by E.ON Ruhrgas <EONGn.DE> and GDF Suez
<GSZ.PA>, had filed an appeal for compensation at international
arbitration, but it said on Wednesday it had decided to withdraw
the appeal.
                                
 "After having evaluated further chances, risks and high
costs of a positive outcome within appropriate timeframe, SPP
decided to withdraw the appeal from international arbitrage,"
the utility wrote on its website.
                                
 It added it had agreed with its Russian gas supplier Gazprom
Export that contracted annual volumes of gas will be temporarily
cut and will be increased in later years, as a reflection of
decreasing gas demand in the global economic crisis.
                                
 The resolution does not imply any financial compensation for
any party to the contract, the company said.
 (Additional reporting by Denis Demkin; editing by James Jukwey)