* Orban expected to discuss nuclear cooperation with Putin
* Hungary's Paks power plant has four Russian-made reactors (Updates with Kremlin statement)
BUDAPEST Jan 13 Hungarian Prime Minister Viktor Orban and Russian President Vladimir Putin will meet in Moscow on Tuesday, the Kremlin said on Monday, and a diplomatic source said they were likely to sign a nuclear cooperation deal.
Hungarian daily Nepszabadsag reported on Saturday that Hungary could soon sign a deal for Russia's state-owned Rosatom to build new blocks at the 2-gigawatt Paks nuclear power plant south of Budapest.
The Kremlin said in a statement the two countries were holding "substantial discussions" on nuclear energy cooperation in view of Hungary's plans to expand its capacity but it provided no details on the agenda of Tuesday's talks.
"Nearly 40 percent of Hungary's electric energy consumption is produced in the Paks nuclear power plant, constructed in cooperation with Russian experts," the statement added.
A diplomatic source, speaking on condition of anonymity, said the two leaders would discuss the nuclear issue and that an agreement would "probably be signed".
A contract has been drawn up in Moscow and could be signed "if all goes well", the source added, without elaborating.
The Nepszabadsag newspaper report said the agreement could involve an extension of existing nuclear cooperation with Russia and also a doubling of current capacity of the Paks plant, which is run by the state-owned energy group MVM.
An MVM spokesman was not immediately available for comment on Monday on the matter.
The Paks plant runs four Russian-made VVER-type reactors.
Local media have estimated the costs of the investment at up to 4 trillion forints ($18.32 billion), making it by far the biggest project in the country since the collapse of communism.
MVM is also involved in the gas business after buying German E.On's natural gas trade and storage units. MVM officials have said Hungary would aim to renegotiate its gas import contract with Russian supplier Gazprom soon.
That contract is due to expire in 2015.
The Kremlin statement said Russia provides some 75 percent of Hungary's natural gas and 80 percent of its oil consumption. Bilateral trade totalled $7.2 billion in the first 10 months of 2013, it said, against $9.7 billion for the whole of 2012. ($1 = 218.32 Hungarian forints) (Reporting by Budapest newsroom and by Gabriela Baczynska in Moscow,; Editing by Gareth Jones)