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A small earthquake struck Spain's east
coast on Tuesday, the strongest ever measured in the area, just days
after the government halted work on a big offshore gas storage plant
following hundreds of recent minor tremors.
Spain's National Geographic Institute said
the earthquake at 0532 local time measured 4.2 magnitude, the strongest
yet in the region around the Gulf of Valencia, a zone not normally known
for seismic activity.
The government last week ordered a stop to
injections of gas into the European Investment Bank-backed Castor
storage plant, while scientists study whether the injections triggered
the quakes.
Industry Minister Jose Manuel Soria said on
Tuesday there was no confirmed link between the earthquakes and the
work on the plant, but seismologists have said they believe there is a
connection, because the tremors started at the same time as the
injections of gas.
The project involves storing 1.3
billion cubic metres of gas in a depleted oil reservoir under the
Mediterranean Sea and sending it via pipeline to Spain's national grid
when needed.
Owner-operator Escal UGS has injected
so-called cushion gas into the reservoir and withdrawn seawater to get
it ready for storage. A phase of injections ended on Sept. 16, and
another round of activity was to resume in October but is now suspended.
Escal said the plant had approval from Spain's environmental authorities.
"The entire process has been carried out
following existing controls and norms for this type of subterranean
storage," Recaredo del Potro, president of Escal UGS, said in a
statement on Monday.
Escal UGS, a partnership between Spain's
ACS which has 66.7 percent of the venture and Canada's Dundee Energy ,
has raised $1.4 billion on debt markets to finance the project.
ACS declined to comment further on Tuesday. Dundee Energy could not be immediately reached for comment.
GETTING WORRIED
An environmental group that has fought the
plant since its conception in 2007 said there was no specific study on
potential seismic activity from Castor and that it was built near a
fault line.
"We insisted on a seismic report. There was
none. If there are small earthquakes now, what will happen when the
plant is at full capacity?" said Cristina Reverter, spokeswoman for the
Citizens' Platform in Defence of Senia Lands.
ACS was not immediately able to confirm
whether the plant was built near a fault line, and no one was able to
comment at Escal or the National Geographic Institute.
The quake, with an epicentre 35 km
southeast of the town of Alcanar, did not cause any damage to buildings
but scared residents unaccustomed to seismic activity.
"People are starting to get worried,"
Alcanar Mayor Alfons Montserrat said by telephone. He has requested an
urgent meeting with the Spanish government over the matter.
The Castor offshore submarine gas storage
facility aims to begin operating next year and is meant to store 30
percent of Spain's daily natural gas needs. Spain imports almost all of
its oil and gas, and the plant is designed to help it guarantee supplies
and keep prices stable.
Castor was the first European project to
issue so-called project bonds. Fitch Ratings agency has assigned a BBB+
rating to the 1.4 billion euros in senior secured bonds to finance the
plant.
Fitch put the bonds on negative watch on
Tuesday, saying it had previously factored in delays up until May 2014
but could downgrade the bonds if the project was delayed beyond then.
"The outcome of the events is open to a
variety of scenarios, ranging from short delays to the project's
schedule, protracted delays ... and increased technical requirements,
and in the worst case scenario, relinquishment or termination of the
concession," the ratings agency said.
http://www.maritime-executive.com/article/Offshore-Gas-Storage-Project-Blamed-for-Spanish-Earthquake-2013-10-03/
Reuters 2013.
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