German utility group RWE announced that it has signed a memorandum of understanding with Russia’s Gazprom aimed at establishing a strategic partnership to construct gas and coal power plants in Europe.

RWE and Gazprom will now negotiate on forming a joint venture to combine existing or new gas and power plants in Germany, the UK and the Benelux countries, said RWE in a statement.

Gazprom’s CEO Alexei Miller, who signed the memorandum with RWE’s Juergen Grossmann in Rome, said that the power industry is one of his company’s priorities in Europe.

“In light of the recent decisions by the German government to reduce its nuclear power programmes, we see good prospects for the construction of new modern gas fired power plants in Germany,” Miller is quoted as saying in RWE’s statement.

Grossmann said the memorandum of understanding could secure “a safe and competitive natural gas supply” for RWE.

For more business news click here