SPAIN
ECONOMIC CONTEXT

The estimated cost of the Castor UGS Project is Cdn$2 billion, with gas injection scheduled to begin in 2012. The natural gas industry in Spain has matured very rapidly, with gas consumption growing at an average rate of 12 percent per year over the period 1998-2008. Natural gas as a component of total primary energy used in Spain has grown from under 6 percent in 1990 to 21 percent in 2008. During this rapid growth period no new UGS facilities have been built.

 

 

Despite the recent economic downturn, the need for gas storage in Spain remains urgent. Total gas demand for 2008 was approximately 38.7 billion cubic metres (1.4 trillion cubic feet), a 10 percent increase over 2007, primarily due to an increase in gas demand for electricity generation. The two existing UGS facilities in Spain have combined storage capacity of 1.7 billion cubic metres (600 billion cubic feet) and a combined delivery rate of 12.5 million cubic metres (391 million cubic feet) per day. This is considered inadequate to meet Spain’s strategic storage and seasonal peaking requirements.

 

Castor is needed to help fulfill these requirements. Castor’s high forecast delivery rate of 25 million cubic metres (883 million cubic feet) per day will contribute strategic storage and reliability of supply to industrial and domestic customers, and could compensate for a potential future supply shortfall equal to the capacity of the Maghreb pipeline or one regasification plant for over 50 days. Castor’s anticipated working gas storage capacity of 1.3 billion cubic metres (45.9 billion cubic feet) will provide a sizeable reserve for seasonal and peak demands.

© Dundee Energy Limited. All Rights Reserved.