"Gazprom and E.ON AG signed a memorandum of understanding in Dusseldorf today to jointly build and run a gas-turbine power plant near the town of Lubmin," the news release said.
Lubmin is near the landfall of the future Nord Stream pipeline through which the gas needed for the power plant is to be delivered. The pipeline is being built under the Baltic Sea to pump Russian natural gas to Germany.
The parties agreed to take a final investment decision on the plant in 2009, and the project is to be commissioned in 2011.
Gazprom and E.ON, the world's largest investor-owned energy service provider, will set up a joint venture on a parity basis to implement the project.
The Gazprom group will be engaged in the whole chain: from gas deliveries to the sales of generated electricity.
For E.ON the investment forms part of the company's ambitious 60 billion euro investment program for new markets, modern gas and power infrastructure and efficient, forward-looking power station technologies.