Fitch Puts Castor Gas Storage Bonds on Watch as Quake Hits Spain

Fitch Ratings put 1.4 billion euros ($1.9 billion) of secured bonds issued by Spain’s Castor Gas Storage facility on rating watch negative as an earthquake hit an area of Valencia near the offshore site.

Spain’s Industry Ministry ordered the underground facility, which is still carrying out tests, to stop injecting and extracting gas at the site on Sept. 26 and commissioned a study into seismic activity that had been detected in the area, the ministry said in an e-mailed statement last week. Today, an earthquake of magnitude 4.2 was detected at 5:32 a.m., the National Geographic Institute said on its website.

“In a worst case scenario the project may be terminated by the government authorities on the risk of repeated seismic occurrences of high magnitude,” Fitch said in a statement today.

The project, which started in 2008, is run by Escal UGS, which is part-owned by ACS SA. ACS had no comment today when contacted by Bloomberg News. No one was immediately available to comment at Escal.

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