German utility E.ON AG said Friday that it plans to build a gas-fired power plant in eastern Germany in a joint venture with Russia's natural gas monopoly, OAO Gazprom.
E.ON said the two companies signed a memorandum of understanding covering the construction of the 1.2 gigawatt plant at Lubmin, which is scheduled to start operating in 2011.
The plant will use gas from the planned "Nord Stream" pipeline that will take Russian gas to Germany under the Baltic Sea, bypassing transit countries. The site will be near the German end of the pipeline.
E.ON and Gazprom plan to form a joint venture for the project in which both companies will have a 50 percent stake, the German company said. Friday's memorandum states that "the parties will make the final investment decision in 2009," it added.
The two companies "see this project as an important element of collaboration on sales markets for Russian gas," the company's statement said.
E.ON also has been conducting talks with Gazprom aimed at giving E.ON a stake in a Siberian gas field in exchange for stakes in its European assets.
E.ON shares were down 0.5 percent at 124.15 (US$187.80) on the Frankfurt exchange, but were performing better than the average of the DAX index of blue chip stocks.
