RWE and Gazprom to Pursue Strategic Partnership
German utility RWE AG has entered into a Memorandum of Understanding on strategic partnership in power generation in Europe with Russia’s Gazprom.
The two parties will commence “exclusive” negotiations, to form a joint venture that would bring together existing or proposed gas and coal power plants in Germany, United Kingdom and the Benelux countries.
"The power industry is one of the priorities of Gazprom in Europe," said Alexei Miller, Gazprom chief executive.
The announcement follows following Germany’s decision this past May to phase out nuclear power. Miller said previously said that this provided Gazprom with an opportunity to expand its presence in Europe's largest power market.
Gazprom already owns just under 50 percent of German gas transport company WINGAS and 11 percent of VNG, eastern Germany's largest gas company.
There has been speculation that Gazprom may seek a direct stake in RWE, however that was not mentioned in today’s announcement.
The joint venture could also see the resolution of an on-going dispute between the German utility and its Russian supplier over the renegotiation of gas supply contracts.
Any deal would face the scrutiny of German antitrust officials to ensure that there was not a substantive negative impact on market competition.
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