CASPIAN BASIN ENERGY DIPLOMACY AMBASSADOR MANN

C O N F I D E N T I A L ANKARA 004109

SIPDIS

E.O. 12958: DECL: 07/08/2014
TAGS: ENRG EPET ETRD PREL TU
SUBJECT: CASPIAN BASIN ENERGY DIPLOMACY AMBASSADOR MANN
DISCUSSES CASPIAN ISSUES WITH TURKISH ENERGY MINISTER GULER


Classified by Econ Counselor Thomas Goldberger for reasons
1.5 (b) and (d).


1. (C) Summary: EUR Ambassador Steven Mann encouraged
Turkish Energy Minister Guler to work together with the
United States to promote Caspian natural gas exports through
Turkey to Europe, but cautioned about Iranian gas transitting
Turkey. Guler noted Turkey's difficult relationship with
Iran and urged support for an alternative -- a pipeline
bringing gas from Turkmenistan. Saying that it is up to the
market to decide if a Bosphorus bypass pipeline makes sense,
Mann urged Guler to approve the license application for the
Thrace bypass proposal. End Summary.


2. (SBU) Ambassador Mann met with Turkey,s Energy Minister
Hilmi Guler on June 16, on the margins of the Tale of Three
Seas Energy Conference in Istanbul. (Other meetings reported
septel.) Mann urged Guler to think of ways the U.S. and
Turkey can work together to promote natural gas exports from
the Caspian region via Turkey into Europe. However, Mann
warned against the transit through Turkey of Iranian gas --
whether through the proposed Nabucco pipeline or through the
proposed Turkey-Greece interconnector project. Mann said the
transit of Iranian gas "would endanger US-Turkish energy
cooperation and open the way for possible penalties and
sanctions."


3. (SBU) Guler explained Turkey's difficult relationship
with Iran and warned that Iran and Russia are working
together to control natural gas exports to Europe -- they do
not want competition to emerge. Guler appealed for USG help
in developing alternative sources of supply to fill Europe,s
growing demand. He said he had discussed with Azerbaijan
President Aliev the construction of a pipeline connecting
Turkmenistan,s gas fields with the Shah-Deniz line in
Azerbaijan. Guler noted that the southern portion of the
Caspian is only 300-400 feet deep, so the pipeline could be
built for less than $1 billion, and it would solve
Turkmenistan,s problem with the Iranians. Aliyev is open to
this idea, according to Guler, and promised to discuss with
the Turkmenbashi.


4. (C) Mann explained his skepticism about the prospects for
a deal with Turkmenistan,s President Niyazov. The USG still
strongly favors alternative routes for Caspian region gas --
including the proposed Turkmenbashi-Baku route -- but given
Niyazov,s fears of Russia and his dysfunctional
decisionmaking style, we do not expect to achieve any
progress. Mann reminded Guler of Kazakhstan President
Nazarbayev,s continued interest in exporting gas and asked
Guler to explore options to ship Kazakhstan natural gas
through Turkey. He recalled that Nazarbayev, at the 1999
Istanbul Summit, wrote on the document on Caspian exports
"and 20 bcm/y of Kazakhstan natural gas for the European
market."


5. (C) Turning to the issue of proposals for a Bosphorus
bypass pipeline, Mann told Guler that the USG does not favor
one proposed pipeline route over another -- it is up to the
market to decide. However, the USG does want the government
of Turkey to move rapidly and transparently to approve the
required paperwork for the license application for the Thrace
bypass proposal (which has been pending for a year) so that
the commercial options can move forward. Guler said that the
license for the Thrace bypass was being held up by the MFA
and MOD.


6. (SBU) In a separate meeting, MFA Deputy U/S Alev Kilic
told Mann the GOT is still uneasy that the Thrace and other
bypass pipeline options would affect the completion and full
utilization of the Baku-Tbilisi-Ceyhan (BTC) pipeline. Mann
stressed that BTC is far enough along toward completion and
would not be adversely affected by the other bypass options.
The USG had reached such a conclusion in June 2002, when it
approved the TDA grant for a feasibility study for one of the
options.


7. (U) Ambassador Mann cleared this cable.
DEUTSCH