The agreement was signed by the head of Russia's atomic energy agency Sergei Kiriyenko at a ceremony in the Kremlin with Chavez and President Dmitry Medvedev.

Further details were not given about the timing or cost of the construction of the station but the accord builds on a plan agreed by Prime Minister Vladimir Putin with Chavez during a visit to Caracas in April this year.

"Why should Venezuela not have a nuclear power station? This gives an independence, including in times when there is a fall in the price of oil," Medvedev said at a news conference with the leader of the fellow top oil producer.

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