* Saudi wants sensitive enrichment option
* Kingdom seeks to build two atomic reactors
* U.S. technology requires pact with Washington(Adds U.S. official, paragraph 10)
By Rania El Gamal and Alexander Cornwell
ABU DHABI, Sept 9 (Reuters) - Saudi Arabia wants to enrichuranium for its nuclear power programme, its energy ministersaid on Monday, potentially complicating talks with Washingtonon an atomic pact and the role of U.S. companies.
Uranium enrichment has been a sticking point with the UnitedStates, especially after Crown Prince Mohammed bin Salman saidin 2018 that the Sunni Muslim kingdom would develop nuclear armsif regional rival Shi'ite Muslim Iran did.
The world's top oil exporter says it wants to use nuclearpower to diversify its energy mix, but enrichment also opens upthe possibility of military uses of uranium.
"We are proceeding with it cautiously ... we areexperimenting with two nuclear reactors," Prince Abdulaziz binSalman said, referring to a plan to issue a tender for the GulfArab state's first two nuclear power reactors.
Ultimately the kingdom wanted to go ahead with the fullcycle of the nuclear programme, including the production andenrichment of uranium for atomic fuel, he told an energyconference in Abu Dhabi.
The tender is expected in 2020, with U.S., Russian, SouthKorean, Chinese and French firms involved in preliminary talksabout the multi-billion-dollar project.
Although atomic reactors need uranium enriched to around 5%purity, the same technology can also be used to enrich the heavymetal to higher, weapons-grade levels.
Saudi Arabia has backed President Donald Trump's "maximumpressure" campaign against Iran after he withdrew the UnitedStates from a 2015 nuclear pact that curbed Iran's disputednuclear programme in exchange for sanctions relief.
In order for U.S. companies to compete for Saudi Arabia'sproject, Riyadh would normally need to sign an accord on thepeaceful use of nuclear technology with Washington.
The United States would like to sign this pact, known as a123 agreement, a senior U.S. official said at the conference.
"It's important for us, with regards to U.S. technology,we're going to pursue a 123 agreement," Dan Brouillette, DeputySecretary of the U.S. Department of Energy, said.
"We would like to see a 123 agreement accompany anyagreement to transfer U.S. technology or use U.S. technology inSaudi or any other place," he added.
Reuters has reported that progress on the discussions hasbeen difficult because Saudi Arabia does not want to sign a dealthat would rule out the possibility of enriching uranium orreprocessing spent fuel - both potential paths to a bomb.
International concerns about the dual technology helped leadto the 2015 nuclear deal between Iran and global powers. Underthe deal Iran can enrich uranium to around the normal levelneeded for commercial power production.
But in response to U.S. sanctions imposed since Washingtonwithdrew from the deal in May last year, Iran has been breachingthe limits it imposed on its atomic activities step by step.(Writing by Sylvia Westall; Editing by Edmund Blair, Jan Harveyand Alexander Smith)