In a joint press release, the companies said that the business would operate in countries where MOL is a major energy consumer through its oil refining operations. The joint venture’s first step is expected to be the construction and subsequent operation of heat and power plants fired primarily by gas and also by refinery residuals at the Bratislava and Szazhalombatta refinery sites.

The joint venture will allow MOL to control its energy costs and to enhance refinery complexity. The companies said that the alliance would be a strategic fit as the countries in which MOL operates correspond with the foreign territories into which CEZ is hoping to expand. The alliance will allow CEZ to extend its presence in the central and southeastern European electricity markets.

Within the scope of the co-operation, CEZ will also acquire an equity stake of up to 10% in MOL in the near future. The final terms and scope of the co-operation are subject to further negotiation between the parties and are expected to be agreed within two months.

In a separate press release, CEZ said that, as part of its plans to expand into the Polish heat distribution market, it has submitted a bid for the bankruptcy assets of PEC Katowice.