Work halted on giant gas storage plant after minor earthquakes detected in area

EU-backed facility was due to open this summer, and can store 50 days’ of the country’s needs 

MERCÈ PÉREZ PONS / ELENA G. SEVILLANO Tarragona / Madrid 1 OCT 2013 – 15:21CET 

The Industry and Energy Ministry has halted activity at the Castor offshore subterranean gas storage plant after some 200 minor earthquakes were detected last week around the area of Vinarós, on the Ebro Delta in the province of Castellón.

The EU-backed facility, Spain’s largest, was due to open this summer, and has the capacity to store 50 days’ worth of the country’s natural gas needs. But for the last year many local residents, particularly fishermen in the Ebro River delta, have complained about the impact of the vast site, which is located immediately off the coastline.

Developed by Spain’s ACS and Dundee Energy of Canada, Castor is not yet online, and is at the phase of injecting the so-called cushion gas needed to provide the pressurization to extract remaining gas from a storage facility.

In a statement on September 26, the Industry Ministry ordered the injections to be stopped, calling for a detailed report from the country’s National Geographic Institute (IGN) on the seismic activity detected in the area.

Emilio Carreño, director of the IGN, said scientists were puzzled as to why the mini earthquakes were taking place so long after gas injections had stopped. The plant stopped injecting gas on September 16.

Carreño says the IGN had detected 220 mini earthquakes in less than a month, the strongest registering 3.6 on the Richter scale on September 24. He said that the seismic activity was taking place in an area that was normally calm.

The facility takes gas from the national grid for storage and pumps it back into the grid when it is needed, and is based on the geological structure of the old depleted Vinarós Castellon offshore oilfield. A 19-bank international consortium, five of which are Spanish, provided the $1.6 billion in financing. The site will be connected to the coast via a 13.6-mile-long offshore pipeline.

Spain has no hydrocarbons and imports more than 99 percent of its gas needs, making it Europe’s largest importer of liquefied natural gas (LNG), accounting for almost a half of European imports.

Gas consumption is rising quickly. The Arab Spring has highlighted the strategic importance of the Castor project to provide reliable storage of LNG. Algeria is Spain’s biggest supplier, making up around a third of imports. In an earlier bid to diversify supply, in 1998 the government passed legislation restricting any single country from supplying more than 60 percent of Spain’s natural gas imports. Spain is also supplied by Nigeria, Qatar, and Trinidad and Tobago.

The earthquakes have been low intensity, but affected around 75,000 people living along the coastline between the towns of Alcanar in Tarragona, to Peñíscola in Castellón, as well as prompting criticism from environmental groups. The authorities in the town of Benicarló called on the industry ministry to halt the gas injections “until the seismic situation was under control.”

Alcanar’s fishing community also accuses Escal UGS, Castor’s leading contractor, of damaging their nets and says that fishing boats cannot operate within a half-mile radius of the facilities. Escal UGS has paid some financial compensation to local fishermen, but they are still complaining about diminishing catches and are demanding a further 100,000 euros in compensation for damages.

Via http://elpais.com/elpais/2013/10/01/inenglish/1380633532_298816.html

A €150 Million Airport That’s Never Been Used

I reach Castellón, a somewhat sleepy coastal city on the Mediterranean, with a nice park and a phenomenally ugly department store.

As a child, I liked Castellón, the last place where we stopped to get gas before reaching our village. I’m here because I want to know why Castellón built an airport from which no aircraft has ever taken off, an airport that cost €150 million in a city that’s only 65 kilometers from Valencia, which already has an airport that’s much too big for the region.

I leave the Autopista del Mediterráneo and drive along the CV-10 toward the Castellón airport. The CV-10 is the best highway I’ve ever driven on. The asphalt is perfect, the signs are new, and there is grass in the median. After about half an hour, I’m standing in front of a fence arguing with a security guard. The man reaches for his radio and says: “Serra 1 to Serra 2, we have a code 3!”

You can trigger a code 3 by asking a guard at the fence whether you can take a look at the airport from up close, an airport that was built with taxpayer money and was officially opened on March 25, 2011.

I get out of the car. Behind me is a large sculpture standing at the access road to the airport. A good friend of a local politician is still working on the piece, which is unbelievably ugly and reportedly cost €300,000. The guard talks into his radio. From where I’m standing, I can see the tower, some of the 3,000 parking spaces and a portion of the 2,700-meter (8,856-foot) runway.

“I gave your license plate number to the police,” says the guard. I nod and think to myself that the Castellón airport isn’t even the most pointless — and certainly not the most costly — airport in Spain. An airport was built in Ciudad Real, 160 kilometers from Madrid, at a cost of €1 billion. It now serves small private aircraft.

For years, Castellón suffered from the fact that it wasn’t as important, rich or well-known as Valencia and Alicante, the other two major cities in the region. Someone hit upon the idea of changing that by building 17 golf courses. Seventeen 18-hole golf courses translate into a lot of golfers, hence the airport. The golf courses never materialized.

The city behaved like a microcosm of Spain as a whole. Spain didn’t want to be Europe’s little brother. It wanted real airports and real highways. The days were gone when people like my father would arrive at a German train station in jackets too thin for the climate. The new Spain could play football, and it had companies like global telecommunications giant Telefónica and world-famous chefs like Ferran Adrià.

I leave the guard standing where he is and return to the highway. I’ll be in my parents’ village in three hours. A small detour takes me past a large construction site on which the Spanish railroad system is building another high-speed line. The country has more high-speed rail lines than Germany or France.

I ask myself what it must have been like to be a politician in the boom years, a period of senseless intoxication and time without measure. To be re-elected, many politicians had to have something to show for themselves, a project, and preferably one built of stone and concrete. Playing fields, theaters, swimming pools and streetcars were popping up everywhere. The economy had gone mad, and so had politicians. But the democracy was fully functional. Spaniards could have asked where all the money was coming from, and why roads were improving and trains were getting faster, while their children were doing worse in school. They could have elected different politicians, more level-headed ones. I firmly believe that every village, every town and every province got exactly the politician it deserved.

This extract is taken from an article “A Visit To Absurdistan: What Happened to the Spain Where I Was Born?” by Juan Moreno published in Der Speigel. The full article can be seen here:-

http://www.spiegel.de/international/europe/return-to-absurdistan-a-spiegel-reporter-visits-crisis-plagued-spain-a-847513-2.html

The new headache of informing the taxman about assets held abroad

Spanish residents have until the end of this month to declare holdings

JESÚS SÉRVULO GONZÁLEZ Madrid 22 ABR 2013 – 20:12 CET

If you have a bank account, property, shares or bonds abroad worth more than 50,000 euros for each category of asset, then you have only about a week left to declare these assets to the taxman. Failure to do so on time could mean facing a hefty fine.

The Finance Ministry approved the latest obligation on individuals and companies in fall of last year, as part of its drive against tax fraud. The period in which such assets can be declared began at the start of February and ends on April 30.

The Tax Agency hasn’t exactly made things easy: the form on which the assets have to be detailed is not without its complications and can only be sent via the internet. Below are some of the most common doubts raised with respect to this new obligation on taxpayers.

Who has to declare? Individuals or companies that pay personal income or corporate tax with assets and rights overseas valued at over 50,000 euros. The rule applies both to Spaniards and foreigners resident in Spain. The rule does not apply to retirees from other countries who spend periods of the year in Spain.

What assets have to be declared? The Tax Agency identifies three classes of assets: accounts in overseas banks, securities and shares, or other forms of participation in foreign companies, as well as real estate and any rights to the use of real estate.

Beyond what limit must a declaration be made? This is one of the areas that has raised most doubts. No declaration is necessary for each of the three classes if the sum involved for each is under 50,000 euros. For example, a taxpayer with 30,000 euros deposited in a bank account in Germany, a garage in Andorra valued at 45,000 euros and shares in a Swiss company worth 40,000 euros is not obliged to make a declaration. Taxpayers are obliged to declare assets in one of the three classes if the value of those assets is over 50,000 euros, but not in the other two classes if the value is below 50,000 euros.

How do you present the declaration? Through form 720. It can only be sent via the internet, which means that the declarer must have an electronic signature. A number of tax specialists have complained about the complexity of the process.

How are the assets to be valued? In the case of bank accounts, the value is that as of December 21, 2012 and the average balance in the account in the last quarter of the year. As regards assets such as shares, the value is that of the market price at the end of the year. In the case of property, the value is that of the acquisition price at the official exchange rate at the end of the year.

What happens if you don’t declare? Fines amount to 5,000 euros for every detail on the assets omitted. Sanctions may be up to 150 percent of the value of the asset in question.

via http://elpais.com/elpais/2013/04/22/inenglish/1366654455_160057.html

More price rises

Electricity and gas prices will be going up from today. Electricity prices will rise by 3.95% and gas by 2.26%, and gas bottles will go up to 16.45 euros a bottle, more than double their price seven or eight years ago. Gas prices have already risen twice this year after the 0.5% rise in January and 5% rise in April.
This is the second rise of electricity in 2012, having gone up by seven per cent in April. This is in spite of promises earlier in the year that there would be no further rises in domestic fuel. In the last five years electricity prices have increased approximately three-fold.

Castellón resort “rejected” as EuroVegas site after last-ditch casino bid

A day after Castellón announced that it wanted to be considered as a bidder for Sheldon Adelson’s EuroVegas, the Las Vegas Sands Corporation said Tuesday that it would not consider the Valencia province’s offer to host the multi-million-euro mega casino project at the Marina d’Or resort complex.

Company sources said that “only Barcelona and Madrid are being considered” by Aldeson to build his mammoth casino, hotel and convention center project, but “thanked” Castellón for its interest, Europa Press reported.

“At this moment, negotiations are nearly at their final stage,” the sources said, adding that both Barcelona and Madrid still have a “50-50 chance” of hosting EuroVegas.

Castellón made a splurge on Monday when it announced that it was throwing its hat into the ring at this stage of the game.

Lluís Recoder, the Catalan commissioner for territory and sustainability, said that he thought Castellón was “a latecomer.”

Officials at Marina d’Or had said they only made a formal proposal to bid for the project, and were waiting to hear from the chairman and CEO of the Las Vegas Sands Corporation so they can set up a meeting.

Marina d’Or and Castellón airport are two of the biggest construction flops of the past decade

Valencia government officials said they were being “prudent” about the proposal, but regional premier Alberto Fabra on Tuesday was less than discreet. “We are going to give them all the help they want, where it is needed, so that this dream becomes reality,” the Popular Party (PP) premier told reporters. But others, such as Lola Johnson, the Valencia tourism commissioner, and Javier Moliner, the speaker of the regional parliament, played down the announcement by acknowledging that the plans were still in their “infancy.”

Landing EuroVegas would be a huge stroke of luck for Castellón, which has been grappling with two of the biggest regional construction flops of the past decade. Thousands of homes built during the real estate boom sit empty at the seaside Marina d’Or resort, in Oropesa del Mar, while Castellón is also dealing with a white elephant regional airport, which has still not seen a single plane given that it is unable to obtain the necessary flight permits. What’s more, the State Agency for Air Security has found that its main runway is too narrow for airplanes to turn around, and will have to be widened to meet regulations. The subject of intense criticism by the Valencian Audit Office, the airport cost 200 million euros to build with an additional 30 million euros spent on advertising. It was the pet project of Castellón’s former provincial administrator, Carlos Fabra (no relation to Albert Fabra), also of the PP.

Marina d’Or president Jesús Ger has offered EuroVegas some 18 million square meters of land between Oropesa del Mar and Castellón, where he had planned to build the massive Marina d’Or Golf resort. Currently there are three golf courses, a string of hotels and hundreds of apartments built on the land, but the project, which was approved by the Valencia regional government in 2010, never got off the ground.

In 2009, Marina d’Or was 700 million euros in debt. Its workforce was reduced from 1,540 employees to 865.

Carlos Fabra, who remains the PP party leader in Castellón as well as secretary general of the local chamber of commerce, also came out on Tuesday in favor of bringing EuroVegas to Marina d’Or.

“It would be the end of an old chapter and the beginning of a new era for Castellón,” he said in a press release. Fabra went on to say that “its proximity to the airport, its 320 days of sun a year, and the efforts made by Marina d’Or provide the necessary framework to make this a success.”

LORENA ORTEGA Castellón 5 JUN 2012 – 19:29 CET

via http://elpais.com/elpais/2012/06/05/inenglish/1338917024_575153.html

Holiday-homes in least popular destinations expected to take brunt of price falls

Banking reforms being pushed through by the new Government will hit holiday-home prices the hardest, according to a recent article in the Spanish financial daily Cinco Días.

The new Government has introduced reforms to bring down house prices and get banks lending again, but some experts say the measures will mainly hit the price of holiday-homes on the coast, where around 65pc of Spain’s unsold new homes are located.

The price of main homes in Spanish cities, in contrast, has already adjusted enough, argues Josep Oliver, Economics Professor at the Autonomous University of Barcelona. “There is not much room left for price declines,” the article quotes him as saying. “Discounts of up to 50pc are only being considered for holiday-homes or unfinished new-developments.”A mismatch between supply and demand means lower house prices might not stimulate the market. “Whilst the stock grows in holiday-home areas, demand is focused on big cities and provincial capitals where there is little excess and prices have already adjusted,” explains Oliver. So if the financial reforms put downward pressure on prices, it might only be felt on the coast, especially the least popular destinations with too much supply.

Costa del Glut

Almost 65pc of Spain’s new housing glut of 800,000 new homes was built on the coast with holiday-home buyers in mind, mostly in Catalonia, the Balearics, the Valencian Region, Murcia and Andalucia, according to a recent report by CatalunyaCaixa, a savings bank.

The Valencian Community has the biggest problem, with 210,000 unsold new homes, or 26% of the glut, followed by Andalucia with 137,000 and Catalonia with 107,000.

The province with the biggest problem by far is Castellón, in the North of the Valencian Region, and home to the so-called Orange-blossom coast Costa del Azahar, with around 114,000 empty new homes, compared to 57,000 in Barcelona and Alicante Costa Blanca, 52,000 in Murcia, and 40,000 in Valencia province. That means Castellón, a relatively unheard of destination with a new airport that nobody yet flies to, is responsible for around 20pc of the entire Spanish glut of new holiday-homes. New developments in Castellón like Marina D’or development pictured below help explain why.

Marina D'Or

The excess inventory of new homes in Malaga province, home to the Costa del Sol, is relatively minor in comparison. According to local builders there are less than 20,000 new homes on the market, most of which will have sold in the next couple of years. The Costa del Sol is a mature market with good access and diversified international demand where almost everything sells in due course.

The Costa del Azhar is a different story. Who will buy 114,000 new holiday-homes there in any reasonable time-frame? What if prices get really cheap there? Will that help, or is there no demand at any price?

Posted on February 28, 2012 by Mark

via Holiday-homes in least popular destinations expected to take brunt of price falls | Spanish Property Insight Blog.

Moody’s Downgrades Spain’s Valencia Region Further Into Junk

MADRID (Dow Jones)–Moody’s Investors Service Inc. Thursday lowered its rating on Valencia further into junk territory and warned other Spanish regions of a possible downgrade, citing severe liquidity strains.

“As regions access to capital markets remains problematic, they are left with few funding options,” the ratings agency said.

Moody’s cut Valencia by two notches to Ba3 from Ba1.

In December, Valencia was a week late in repaying a EUR123 million debt to Deutsche Bank AG and failed to raise the full amount of a new EUR1.8 billion bond issue.

In highly decentralized Spain, regional governments control around a third of spending. But, faced with gaping budget gaps and towering debt loads, they have faced mounting difficulties to finance themselves.

-By Jonathan House, Dow Jones Newswires, +34 91 395 8121;

jonathan.house@dowjones.com

via Moody’s Downgrades Spain’s Valencia Region Further Into Junk – WSJ.com.

Government forced to step in to stop Valencia debt default

Regional economy chief plays down significance of Madrid’s involvement after loan deadline passes

LORENA ORTEGA / FEDERICO SIMÓN / EP – Castellón / Valencia – 04/01/2012

There is nothing extraordinary about the fact that the Spanish state had to help the government of Valencia meet its payments with foreign creditors, said the regional economy commissioner, Enrique Verdeguer, on Wednesday.

Calling it an isolated liquidity problem, Verdeguer claimed that the Generalitat is meeting all its financial deadlines, although he also admitted to meeting last week with the Spanish Treasury chief, Íñigo Fernández de Mesa. Shortly after that, Madrid decided to step in to ensure that the Valencian government would not default on a maturing debt of 123 million euros with Deutsche Bank.

This is the first time that the state has helped out a region – which in this case, happens to be the most indebted one out of Spain’s 17 semi-autonomous communities. Valencia’s debt-to-GDP ratio is 19.9 percent, and last September its deficit stood at 2.3 percent, a whole percentage point above what the state had authorized for the entire year.

Last year, the Valencian government owed providers 2.4 billion euros in unpaid bills, and pharmacies across the region recently went on a two-day strike to protest the situation. In the last few months, public workers have also been at risk of not getting their checks. But until now, banks had always been paid back promptly by a government that has already been dragged through the mud by the ratings agencies. In December, Standard & Poor’s placed Valencian debt one step away from junk bond status (BBB-).

Yet commissioner Verdeguer held that Valencia has simply done the same thing that other regional governments do through collaborations with the Official Credit Institute, the Treasury and private organizations. He also said that the Spanish Treasury did not underwrite the payment to Deutsche Bank, which was one week late. Other sources at the Valencian economy department said, on the contrary, that the Treasury had indeed guaranteed the payment, while the Economy Ministry denied it.

The key lies in the fact that the arbitrated solution does not constitute a formal guarantee, since the law prevents such a thing. Experts said that it is, in fact, a verbal endorsement – in other words, the Treasury interceded so that another lender would extend Valencia a short-term credit to pay back Deutsche Bank.

Yet even this move will not resolve Valencia’s long-term financial problems. The Spanish tax agency is also trying to help out by advancing the money it gives the regions from its tax receipts. Normally, this money is handed out twice a month, and the next installment was due in mid-January, but Valencia got its part on January 3 as an extraordinary measure.

Meanwhile, Valencian premier Alberto Fabra this week announced a further cut of one billion euros in regional spending that essentially cancels out the recently approved budget. The measures include eliminating 46 public agencies and leaving just six, and doing away with some of the benefits enjoyed by public servants. Regional authorities said these are exceptional measures that will only be in place for two years.

via Government forced to step in to stop Valencia debt default · ELPAÍS.com in English.

New government renegades on campaign tax pledge

Popular Party administration says hikes in personal income and municipal taxes needed to offset blowout in this years budget.

Going back on an election pledge not to raise taxes, the Popular Party government on Friday announced historic widespread 8.9 billion euros in cuts as countermeasures to a bring down an eight percent of GDP deficit for this year – two percentage points higher than the previous Socialist administration had forecast.

Deputy Prime Minister Soraya Sáenz de Santamaría said the across-the board hikes in personal income tax of between 0.75 percent for those on lower incomes and seven percent for those who make more than 300,000 euros annually, will only be in effect for two years.”This is an exceptional move that we didnt foresee,” Sáenz said at a news conference following Fridays Cabinet meeting. “We had to resort to this because the previous government did not comply with its goal in reducing the deficit.”During this years prime ministerial campaign, Mariano Rajoy and other PP officials pledged not to raise taxes, and criticized the Zapateros governments decision in September to introduce a wealth tax for two years. The Socialist administration had forecast that Spain would end the year with a six percent of GDP deficit.Rajoys Cabinet also approved measures to hike the property-value-based municipal tax IBI for the next two years for dwellings that are appraised above the average price. But the PP administration has decided to reinstate the special tax deduction for new home purchases retroactive from 2010 – the same year it was eliminated by the previous Zapatero government – and introduce a super-reduced value-added tax VAT rate of four percent for purchases of a new home.The prime minister is trying to bring Spains debts down to meet a European budget deficit target of 4.4 percent by the end of 2012.At the same time, Sáenz de Santamaría confirmed a previous announcement that there will be hike in pensions based on the consumer price index IPC, and freezes in 2012 on public sector salaries. Government workers will also see their work week extended to 37.5 hours from the current 35 hours per week.The minimum wage will also be frozen at 641.40 euros per month.Political parties and labor organizations will also receive 20 percent less from their annual government subsidies, and Sáenz de Santamaría announced that the government will introduce in Congress next year reforms to political party financing laws.The government has decided to postpone presenting the 2012 budget until March.Besides the deputy prime minister, Rajoys three top government officials in finance and labor – Economy Minister Luis de Guindos, Finance Minister Cristóbal Montoro, and Labor Minister Fátima Bañez – also appeared before reporters to explain the measures.

M. D. – Madrid – 30/12/2011

via New government renegades on campaign tax pledge · ELPAÍS.com in English.

The Castor Underground Gas Storage project nearing final stages.

The Castor project consists of the conversion of the Amposta oil field into underground gas storage. The Amposta field lies at a depth of 1,800 m approximately 22 km off the coast of Vinaros. It involves two offshore platforms for 13 wells and processing facilities, the drilling and completion of 13 new wells, an onshore compression and processing plant in Vinaros, with 30 km long pipeline joining the two.
The top side of the marine platform for the project, built in Texas, has now reached the coast of Vinaròs. This large structure of about 9,000 tons sailed several weeks ago from the port of Corpus Christi in Texas where it was built by the multinational Kiewit.
The legs that will support the platform were manufactured by Dragados Offshore in Cadiz, have already been put in place. This base arrived last week in two ships and consists of six legs, anchored to the ground, about 90 metres deep by twelve piles of about 100 meters long, 2 metres in diameter and weighing 300 tons.
The semi-submersible vessel SSCV Thialf, from Rotterdam, the largest floating crane in the world, capable of lifting 14,200 tons (7,100 tons each pulley) performed the installation work on this. Now the work is to place the top side, on the base in a very delicate and precise operation. The work of the Thialf then ends with the placement of the 250 ton bridge linking the two platforms. This work will last about two weeks, so the forecast is that it will all be completed by the 24 th of this month. After this it will remain to connect the pipes. The first tests are planned for early March 2012 and the project is expected to be operational in May.