Oil Report

Hungary's Pannonplast to build geothermal plants

BUDAPEST, Sept 29 (Reuters) - Hungarian plastics maker Pannonplast PANP.BU will build geothermal plants for 350 million euros ($496.5 million) in partnership with Iceland's VGK Honnun, Pannonplast said late on Friday.

Pannonplast had asked for its shares to be suspended on the Budapest Stock Exchange on Friday ahead of the announcement, which said the plants will start operating in mid-2010.

VGK Honnun Engineering, Iceland's Glitnir Bank GLB.IC and investment firm FL Group FL.IC said in January they had set up a company which aims to invest up to $1 billion into the fast-growing global geothermal sector.

Hungary has one of the biggest potentials on the European continent for geothermal energy, which involves drilling wells that allow hot water or steam to rise and power turbines or heat homes. ($1=.7049 Euro)