ENERGY DISCUSSION AT TURKEY-U.S. EPC

C O N F I D E N T I A L ANKARA 007271

SIPDIS


E FOR S. CLARKE
EUR/SE FOR D. HENGEL


E.O. 12958: DECL: 11/18/2013
TAGS: ENRG PREL ECON TU
SUBJECT: ENERGY DISCUSSION AT TURKEY-U.S. EPC

Classified by Charge, Robert Deutsch for reasons 1.5 (b) and
(d).



1. (C) Action Request: Post urges Washington to reconsider
the decision to drop energy as a separate topic on the EPC
agenda. This is not just to mollify the Turks; we have real,
substantive energy issues to discuss. We consider energy to
be a critical building block of our economic and political
relationship with Turkey. Turkey considers U.S. support for
the East-West Energy Corridor a lynch pin in its energy and
economic policy and its relations with nearby countries, and
we have encouraged Turkey to promote this view in the region.
However, the U.S.-Turkey dialogue on energy issues has
fallen off in recent months, and Turkish officials are
concerned that the U.S. has lost interest, or more troubling,
is considering a change of energy policy in the region.



2. (C) Ambassador and embassy officers continue to encourage
Turkey's critical role in the East-West Energy Corridor. The
recent vote of the IFC and EBRD to contribute to the
financing of BTC is an important step, but we should not
think that BTC is out of the woods, much less that the other
aspects of the East-West Energy Corridor are safe.
Furthermore, we need to discuss next steps in our
collaborative efforts to find European markets for surplus
natural gas.



3. In sum, there are a number of important issues that need
to be addressed between senior U.S. and Turkish officials:


-- BTC construction is underway, but construction
difficulties, political instability in Georgia and security
concerns merit continued close attention.


-- Iran continues to promote itself as a cheap alternative
(to Turkey and beyond to Europe) as a cheap source of natural
gas.


-- Iraq's potential to supply oil and natural gas to Turkey
and beyond introduce a new variable.


-- Turkey today announced a deal with Gazprom on its natural
gas import agreements.


-- Turkey is concerned about U.S./Iraqi intentions regarding
the Kirkuk-Ceyhan pipeline.


-- Odesa-Brody heightens concerns about Bosphorus tanker
traffic and the need for another bypass.


On some of these issues, Turkish officials need reassurance
of our long-term commitment to the East-West Energy Corridor.
On other issues, they do not know where the U.S. stands.



4. (SBU) Turkey is the essential partner in the East-West
Energy Corridor. We think the EPC presents an important
opportunity to affirm U.S. foreign policy interest in
Turkey's energy policy and support for the East-West Energy
Corridor.
EDELMAN