Editions:  Austria · Denmark · France · Germany · Italy · Norway · Spain · Sweden · Switzerland

Spain pays €1.35 bn for aborted gas project

Share this article

Spain pays €1.35 bn for aborted gas project
07:39 CEST+02:00
Spain's government said Friday it will pay €1.35 billion ($1.7 billion) in compensation to a Spanish firm which was forced to stopped work on a vast underwater gas-storage project that was suspected of causing minor quakes.

Known as Project Castor, the scheme aimed to store gas in a depleted oil reservoir 1.7 kilometres (1.05 miles) under the Mediterranean Sea in the Gulf of Valencia and send it via a pipeline to Spain's national grid.

The government halted operations at the facility in September 2013 after more than 200 minor earthquakes were detected in the area which geologists and environmentalists blamed on gas injections.

The company which owns and operated the facility, Escal UGS, in June 2014 said it was giving up its concession for the gas storage project, which was financed by the European Investment Bank.

Deputy Prime Minister Soraya Saenz de Santamaria said Friday that the government had decided to "freeze the installations and ban the injection or storage of gas" at the facility.

It would also award Escal UGS €1.35 billion in compensation, she told a news conference.

Escal UGS is majority-owned by Spanish builder ACS, with nearly 67 percent, while CLP, a group controlled by Canada's Dundee Energy, has a 33-percent stake in the firm.

Get notified about breaking news on The Local

Share this article

From our sponsors

Change the world with a master's degree from Sweden's Linköping University

Master's students at world-leading Linköping University (LiU) aren't there simply to study. They solve real-world problems alongside experts in fields that can create a better tomorrow. Do you have what it takes to join them?

Advertisement