Hungarian CEGE acquires well for geothermal power project in Hungary

Hungarian CEGE acquires well for geothermal power project in Hungary View over Budapest, Hungary (source: flickr/ Rodefeld, creative commons)
Alexander Richter 1 Feb 2011

Central European Geothermal Energy (CEGE), jointly held by Australian Green Rock Energy and Hungarian MOL, announces the exercise of an option to purchase a geothermal well with the target of the first geothermal power project in Hungary.

In release by Australian Green Rock Energy, Central European Geothermal Energy (CEGE), in which the company holds a 50% stake, announces it has exercised the option to purchase well with target of first geothermal power project in Hungary.

Green Rock Energy announced on 21 October 2010, that its 50% owned Hungarian geothermal developer CEGE had acquired a comprehensive data set from a former petroleum well owned by MOL close to existing power infrastructure. MOL holds the other 50% in CEGE. CEGE had also negotiated with MOL an option to purchase the well.

Since October, additional well temperature and pressure measurements have been taken and the data set has been further evaluated and interpreted by CEGE, MOL and BESTEC experts.

BESTEC GmbH is the German geothermal power generation developer and operator managed by Green Rock non-executive director Dr. Jörg Baumgärtner. The experts’ conclusion is that the well data indicates a sizeable geothermal reservoir which should be capable of supporting several MW of power generation capacity. CEGE has therefore exercised the option to purchase the well.

The target is to commence power production in 2012, subject to CEGE obtaining the geothermal concession for the area under legislation being introduced by the Government of Hungary. Geothermal energy is expected to be a major contributor to Hungary meeting its renewable energy target of 13% by 2020 given that its wind, solar and hydro resources are limited.

As previously advised, the total cost to Green Rock for data acquisition and purchase of the well was about A$1 million (~US$1m/ EUR 730,000).

MOL (BSE: MOL) is Hungary’s largest company, with a market capitalisation of over US$10 billion. It is a leading integrated oil and gas company in Central & Eastern Europe, with the following core activities: exploration and production of crude oil, natural gas and gas products; refining, transportation, storage and distribution of crude oil products, both retail and wholesale; transmission of natural gas; production and sale of olefins and polyolefins; production of electricity and thermal energy from gas and renewable resources.

CEGE (Central European Geothermal Energy) is owned by MOL (50%) and Green Rock (50%). It was established in 2008 to explore and develop geothermal energy in Hungary and surrounding countries. Based in Budapest, CEGE currently has a staff of four, including one secondee from Green Rock.”

Source: Company release by Green Rock Energy via e-mail