This undated file photo provided by Daewoo Engineering & Construction shows the Dukovany nuclear power plant in the Czech Republic. Yonhap

Korea's state-run Korea Hydro & Nuclear Power (KHNP) said Friday it has reached an agreement with U.S.-based Westinghouse over an intellectual property rights dispute and to join forces in the global nuclear energy market.

"KHNP and Korea Electric Power Corp. have agreed with U.S. Westinghouse to settle the intellectual property dispute," KHNP said in a release.

KHNP added it plans to establish a "new strategic relationship" with Westinghouse to bolster bilateral cooperation between South Korea and the United States in the global nuclear energy industry.

"The agreement will serve as an opportunity to set up a closer relationship between KHNP and Westinghouse," KHNP CEO Whang Joo-ho said.

The agreement is expected to remove a major hurdle for KHNP's successful signing of the project to build two reactors at the Czech Republic's Dukovany power plant, as Westinghouse had been claiming the South Korean firm infringed on its intellectual property.

South Korea expects to finalize the agreement with the Czech Republic in March, after being selected as the preferred bidder in July 2024.

Industry Minister Ahn Duk-geun said the government welcomes the settlement, expressing hope it will lead to active exchanges between the countries' businesses in the global nuclear reactor market.

"The agreement has laid the groundwork for the governments and private sectors of both countries to pursue mutually beneficial cooperation in the global nuclear reactor market while adhering to nonproliferation standards," Ahn said.

The companies declined to disclose specifics of the deal, citing a confidentiality agreement.

Industry watchers suggest KHNP may have offered royalties or contracts related to the Czech nuclear energy project while pursuing joint partnerships for exporting reactors to other countries in the future.

The announcement also came around a week after Seoul and Washington formally signed a memorandum of understanding on principles concerning nuclear exports and cooperation.

The bilateral agreement highlighted the two countries' mutual commitment to maximizing the peaceful use of nuclear energy in accordance with the "highest standards" of safety, security, safeguards and nonproliferation. (Yonhap)