Spanish firm to withdraw from gas-storage project after quakes

EFE Ingles |

Madrid, Jun 25 (EFE).- Spanish company Escal UGS said Wednesday it is relinquishing its concession for a gas-storage project in the Mediterranean blamed for several hundred minor earthquakes.A report in May from Spain's National Geographic Institute found that the more than 400 earthquakes in September 2013 along the coast of the eastern province of Castellon were "directly related" to gas injections into the Castor storage plant.Escal's majority owner, Spanish civil engineering group ACS, said in March that it understands the company is entitled to return the undersea facility at any time during the 25 years after the concession was awarded and the right to collect the net book value, "so the value of the investment is fully recoverable."The plant had an initial budget of 700 million euros ($954 million), although Industry and Energy Minister Jose Manuel Soria later said the cost had risen to 1.7 billion euros.Soria recently acknowledged that it would take years to gather the information needed to determine whether it is safe to bring the facility into full operation.The project was suspended last September due to the temblors in the region, the strongest of which was a magnitude-4.2 quake.The aim of the project was to use a depleted oil reservoir 1,750 meters (5,735 feet) below sea level and 20 kilometers (12 miles) off Castellon's coast to store enough imported natural gas to cover a third of Spain's gas needs for 50 days, and thus keep prices stable.EFEeco/mc

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