MFA DISPUTES REPORT THAT TURKEY AND IRAN AGREED ON

C O N F I D E N T I A L ANKARA 003900

SIPDIS

STATE FOR CBED AMBASSADOR MANN

E.O. 12958: DECL: 07/12/2014
TAGS: ENRG EPET ETRD ETTC IR TU
SUBJECT: MFA DISPUTES REPORT THAT TURKEY AND IRAN AGREED ON
GAS EXPORTS TO EUROPE

REF: ANKARA 3336

Classified By: Econ Counselor Thomas Goldberger for reasons 1.4
(b) and (d)


1. (U) According to a report carried by the Turkish online
news service Zaman and several Iranian news outlets, Iran has
offered to reduce the price of its natural gas exports to
Turkey if Turkey agrees to facilitate the transport of
Iranian gas to Europe. The report added that the deal was
reached last week in Turkey during the visit of Iranian Oil
Minister Zengene. Meeting with Econoffs July 12, MFA Energy
DDG Hakki Akil denied that Turkey had reached any deal with
Iran involving Iranian gas exports to Europe and called the
press reports "disinformation."


2. (C) Comment: This is not the first time we have seen
reports of deals with Iran that have proved false. It is
likely that this report is false, as well. But we would not
be surprised if there was a germ of truth -- at least that
the Iranians made the offer. Turkish officials have been
seeking a price reduction, similar to the one they got from
Gazprom, but with little success. Turkish officials have
repeatedly told us how difficult and unreasonable the Iranian
have been in these discussions.


3. (C) Over the past months in our conversations with
Turkish energy officials, it has become clear that they are
under increasing pressure from Iran and Europe to allow
Iranian gas to transit Turkey to Europe, and they are
concerned about the U.S. reaction. (As reported reftel,
Energy Minister Guler asked Ambassador Edelman June 8 for
information about ILSA and how it would impact Turkey's role
as a transit country.) The sweetener of a price reduction --
something that the GOT desperately wants to fulfill populist
campaign pledges to reduce energy prices -- will up the ante
considerably. Akil said that although Turkey is not now
obligated under the Energy Charter to allow the transit of
Iranian gas, one day Turkey will succumb to European and
Iranian political pressure unless an alternative supply
source -- such as Turkmenistan -- is found to satisfy
Europe's demand.
DEUTSCH