CASTOR UNDERGROUND GAS STORAGE (TEN)

The Castor UGS project consists of the conversion of a depleted oil field (the Amposta field) into underground gas storage. The Amposta field lies at a depth of 1 800 m approximately 22 km off the east coast of Spain in the Mediterranean Sea. The project involves two offshore platforms for 13 wells and processing facilities, the drilling and completion of 13 new wells, an onshore compression and processing plant located in the municipality of Vinaroz, and an adjoining 30" pipeline 30 km long.

Natural gas storage facilities play an important role in providing flexibility and security of gas supply in a sector characterised by large variations in demand and rigid supply, e.g. to meet seasonal demand variations, sudden demand peaks and at times to serve as back-up in case of interruption of a supply stream. The Iberian peninsula has limited gas storage capacity and the Castor UGS is a priority project of the Spanish energy plan that once in operation will provide for about 7% of the country's peak demand.

Given its technical characteristics the project falls under the Annex I of the Environmental Impact Assessment (EIA) Directive (85/337/EEC and amendments). The project as a part of the Spanish energy infrastructure plan was covered by the strategic environmental assessment carried out by the Spanish Energy Ministry in 2007. The promoter has also prepared an EIA that was submitted to the competent authority in August 2008. Public consultation took place in September and October 2008, and the environmental permit (D.I.A) was published in November 2009.

The promoter is a contracting entity as defined in Directive 2004/17/EC. The project will be implemented under a turnkey engineering, procurement and construction (EPC) contract that was awarded following a negotiated procedure after publication of a pre-qualification notice in the Official Journal of the EU.

The financing of this project has been approved to include a project bond credit enhancement option.