A Hungarian-Austral-Icelandic consortium is established under MOL leadership for the establishment of the first Central-Eastern European geothermal power plant

MOL is a pacesetter in research and application of environment-friendly renewable energy sources. As the latest step of its efforts, MOL, Australian-based Vulcan Ltd. and Icelandic Enex hf. establish an international consortium to explore opportunities of exploiting thermal water energy in the Iklódbördőce area (Zala County, Hungary).

For a long period of time, MOL Plc. has been working on the preparation of a project aimed at the establishment of the first Central-Eastern European geothermal power plant. The initial feasibility study phase of the Project is completed, the next phase focused on actual implementation is scheduled to kick off in Y2006. This latter phase of work involves testing of existing hydrocarbon wells with a view to determine the technological parameters of a geothermal energy system to be installed adjacent thereto.

The Consortium is established today under MOL leadership for carrying out feasibility study work. MOL Plc. with a majority interest in the Consortium, that will act as operator (implementer), teamed up  with Australian-owned Vulcan Ltd. and Icelandic Enex hf.

The Co-operation Agreement and the related Rules on Accounting Procedures concluded with a view to establish the said Consortium is signed on behalf of MOL by Attila Holoda, Director of Central European Exploration & Production (CEEP) and György Szűcs, Head of CEEP Tendering; on behalf of the Enex hf., it is signed by Lárus Eliasson, Managing Director; and on behalf of Vulcan Ltd., it is signed by Stephen Keenihan, Managing Director.

The Co-operation Agreement stipulates the principles of establishment and operation of the Consortium and lays down the legal framework for exploration tasks scheduled to be carried out this year.

In the course of exploration, the Consortium will convert two out-of-use hydrocarbon wells into a thermal water production well and an injection well, and install a pipeline between them. For a few months, one of the wells will be used for thermal water production and the other well for injecting the same back to the water-bearing layer. This pilot is designed to gather detailed data on the wells and water-bearing layers for subsequent construction and operation of the planned geothermal power plant. Based on gathered data, the size and type of the technological system to be installed for the exploitation of thermal energy can be determined. The pilot site is located in the Iklódbördöce-Csömödér area (North-Zala County, Hungary).

If the pilot exploration brings favourable results, the partners will establish a joint enterprise for the implementation of the first Central-Eastern European geothermal power plant. The power plant block will be erected in Y2007 and scheduled to be commissioned in Y2008. Based on data currently available and in case of successful well tests, the throughput of the first domestic geothermal power plant will be between 2 - 5 MW.

###

Members of the Consortium:

MOL Plc.

MOL is the leading integrated oil and gas group in Central and Eastern Europe and the largest company in Hungary by sales revenues. The core activities of the Group include: exploration and production of crude oil, natural gas and gas products; refining, transportation, storage and distribution of crude oil products in both retail and wholesale markets; import, transmission, storage and wholesale trading of natural gas and other gas products; the production and sale of olefins and poly olefins.

Enex hf. (Iceland)

This company was established by leaders of the Icelandic geothermal industry with a view to represent Icelandic geothermal industrial practices and technology of decades of experience abroad, including in Hungary. Enex's experience is well characterised by more than 200 MW of geothermal power plant throughput realised.

Vulcan Ltd.

This company is established by Australian-based Hercules Energy (parent company) for carrying out geothermal activities in Hungary. In addition to geothermal activities, Hercules Energy is also involved in Hungarian domestic hydrocarbon exploration and production projects.