UPDATE 3-Venezuela takes Conoco to court over refinery stake

* Venezuela contests Merey Sweeny stake in U.S. court

* PDVSA to buy power plants in electricity crisis

* Venezuela says OPEC should not raise output in March (Adds oil minister comments on PDVSA private partner payments, names companies that could install power plants in Venezuela.)

CARACAS, Feb 25 (Reuters) - Venezuela is taking ConocoPhillips to court in the United States in a dispute with the U.S. oil company over a unit of the Sweeny refinery, Oil Minister Rafael Ramirez said on Thursday.

Venezuela said in September it was planning to sue over Conoco's (COP.N) bid to buy state oil company PDVSA's 50 percent share in the Merey Sweeny coker unit at the Sweeny refinery in Texas.

Conoco has exercised an option to buy Venezuela's stake, saying PDVSA broke its contract by failing to deliver oil to the plant last year.

Conoco left the South American OPEC member in 2007 after President Hugo Chavez took over operations at several oil projects.

Speaking at a parliamentary event, Ramirez also said PDVSA still owes 2008 dividends to major oil companies that were partners in PDVSA joint ventures in the country. He said Venezuela was in talks with the companies to reinvest the money in projects, rather than pay them.

"We've been reaching various kinds of agreements," Ramirez told reporters.

"Remember, with respect to the dividends, the shareholders may decide to reinvest them. Lots of companies have plans to expand production here and that is in our interest too."

Ramirez also said Venezuela was buying power plants with output of 800 MW to 900 MW to offset problems caused by an electricity crisis.

The government is in talks with companies including General Electric Co (GE.N), Siemens AG (SIEGn.DE), Hyundai (009540.KS) and Sinohydro Corp [SINOH.UL], which could install new plants, Ramirez added.

Ramirez reiterated his position that OPEC should not increase output quotas at its next meeting in March.

"We are solid in our position that production should hold. There is no need for an increase in production," Ramirez said. (Reporting by Joshua Schneyer and Marianna Parraga; Editing by Walter Bagley and Jim Marshall)