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Identifier
Created
Classification
Origin
02ANKARA8141
2002-11-12 15:42:00
CONFIDENTIAL
Embassy Ankara
Cable title:  

MFA ON TURKEY-GREECE GAS INTERCONNECT

Tags:   ENRG  ECON  EPET  AJ  GG  KZ  TU 
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						C O N F I D E N T I A L ANKARA 008141 

SIPDIS


STATE FOR E, EB/CBED, EB/ESC, EUR/SE
STATE PASS NSC FOR QUANRUD AND BRYZA
USDOC FOR 4212/ITA/MAC/OEURA/CPD/DDEFALCO
USDOE FOR PUMPHREY/ROSSI


E.O. 12958: DECL: 11/11/2012
TAGS: ENRG ECON EPET AJ GG KZ TU
SUBJECT: MFA ON TURKEY-GREECE GAS INTERCONNECT


REF: ANKARA 8018


Classified by Econ Couns Scot Marciel, Reason 1.5 (b,d)




1. (C) Summary: MFA Deputy DG for Energy Hakki Akil
reiterated to Econ Couns BOTAS's request for USG assistance
in encouraging the Greeks to accept paying a higher price for
natural gas from Turkey in the short-term for the long-term
benefits the Turkey-Greece interconnect would provide. Akil
also said that BOTAS General Manager Gokhan Bildaci was key
to progress on East-West energy corridor issues, noting that
he would encourage his AK party contacts not to replace
Bildaci. End summary.




2. (C) MFA Deputy Director General for Energy, Water, and
Environment Hakki Akil called in Econ Couns November 12 to
request USG assistance in encouraging the Greeks to accept
paying a slightly higher price for gas from Turkey (compared
to the price it says it pays for gas from Russia) in the
short-term for the long-term benefits the Turkey-Greece
interconnect would provide. BOTAS General Manager made the
same request to econoff November 4 (reftel). Akil said the
Greeks claimed they could not accept a higher price than what
they were paying Russia for gas; however, he was not
convinced the price they quoted was the "real" price they
were paying the Russians. (Note: Akil commented that it
would be useful to know what the Europeans, including Greece,
were paying Russia for gas, and asked if that was information
the USG could provide.) Still, Akil said, even if Greece did
have to pay an additional USD five million more over two
years for gas from Turkey (his quick estimate), wouldn't that
be a small price to pay for a significant political and
strategic returns?




3. (C) Akil noted that, for its part, BOTAS was willing to
waive all transit fees and offer Greece a price slightly
lower (about one dollar) than its current lowest purchase
price. Based on figures provided by BOTAS (reftel), that
would put DEPA's purchase price at about USD 122 per thousand
cubic meters. Once the (cheaper) Shah Deniz gas came online,
Turkey and Greece could renegotiate a lower price. Econ
Couns responded that, while the U.S. did not want to
intervene in DEPA-BOTAS negotiations, we did want to
encourage progress on the Turkey-Greece interconnect. He
said he would pass this information on to EB/CBED Ambassador
Mann, who would be in Athens the following week.




4. (C) On the broader subject of Caspian gas to Europe, Akil
said Turkey had been busy since MFA Deputy U/S Kilic and
Ministry of Energy U/S Yigitguden's September meetings in
Washington. BOTAS now had signed memorandums of
understanding to pursue interconnect options with Bulgaria,
Hungary, Romania, Bosnia, and Austria. He said the GOT
appreciated our efforts with the Europeans, and looked
forward to discussing the next stage of our joint "action
plan" over the next month.




5. (C) On other issues, Akil noted that Turkey had resumed
the flow of gas from Iran on November 11, and would start
receiving Blue Stream gas on December 20. Reflecting on AK's
election victory, he said he was certain that, at the
Ministry of Energy, the Minister and Under Secretary would be
replaced, but some of the Deputy Under Secretaries may
remain. He stated that he was mostly concerned about BOTAS
General Manager Bildaci, noting that Bildaci was honest,
smart, and extremely knowledgeable, particularly on the BTC
contracts. Akil said he would try to convince his friends in
AK to keep Bildaci on as long as possible.
PEARSON