TURKISH STRAITS - TANKERS AND BYPASSES

UNCLAS SECTION 01 OF 03 ANKARA 001993

SIPDIS

SENSITIVE

USDOE FOR CHUCK WASHINGTON
USDOC FOR 4212/ITA/MAC/OEURA/CPD/DDEFALCO
NSC FOR BRYZA

E.O. 12958: N/A
TAGS: ENRG EPET EWWT SENV TU
SUBJECT: TURKISH STRAITS - TANKERS AND BYPASSES

REF: A. ISTANBUL 412


B. ANKARA 1306 AND PREVIOUS

C. 04 STATE 178586

This cable was coordinated with Congen Istanbul. Sensitive
But Unclassified.


1. (SBU) SUMMARY: Turkey is publicly and privately set on
Samsun-Ceyhan as the winning prospective Bosphorus bypass,
but next steps are elusive and ambiguous. All parties
trumpet the success story of BTC -- as nominally the first
Bosphorus bypass, expecting first tanker load at Ceyhan late
autumn 2005. Recent accidents in the Turkish Straits
highlight the risks and challenges of increasing and varied
traffic in the straits. There is room for USG, GOT, and
other governments and companies to engage on improving
maritime safety. The VTS is a useful monitoring system, but
it has its limits in preventing accidents. Turkey receives
higher marks this winter for actively managing large tanker
traffic, significantly lowering tanker waiting time over the
previous winter. End Summary.

Improvements in Turkish Straits - but Still Accidents
-------------- --------------


2. (SBU) Oil company representatives tell us that during the
past winter season the GOT greatly improved its management of
large tanker (greater than 200 meters) traffic in the Turkish
Straits. On the margin of the March 28-29 Caspian-Black Sea
Oil and Gas Conference in Ankara and in subsequent
conversations, Chevron Texaco Marine Representative Kjell
Landin made the following observations to Energy Officer
(consistent with points made separately by BP officials to
Embassy and Congen officers):

--WAITING TIME SIGNIFICANTLY REDUCED: While total transit
time (combined Bosphorus and Dardanelles both directions) at
one point reached 34 days in the winter of 2003/04 and total
transit time exceeded 15 days for that entire four month
winter period, total transit time exceeded 15 days for only a
few days this past winter of 2004/05.

--WHY?: Landin and others give GOT credit for more efficient
use of the Vessel Traffic System (VTS, which came on line in
the middle of the winter of 2003/04). For example, the GOT
applied measures such as moving to full day unidirectional
passage and reducing tanker staggering time to 75 minutes, as
needed when a queue developed. Although the 03/04 winter
appeared harsher, total straits closures totalled 5-6 days
both winters. The GOT's task this winter was made easier by
a few other significant factors. Approximately 1.5 million
tons less oil were shipped out each month from the Black Sea
January/February, compared to November/December, partly due
to less production in Russia and partly due to diversion of
some crude oil for egress to the Baltic Sea, in response to
the delays the year before. In addition, some empty tankers
were pre-positioned in the Black Sea before the winter.

--WILL IT CONTINUE?: The VTS and advanced methods were better
employed this winter than the previous year, when there was
evidence to suggest that there was insufficient political
will to use the VTS to maximize safe passage, perhaps, Landin
felt, out of a desire to call attention to the costs and
risks of Turkish Straits passage. According to Landin,
there was room for BOTH increased safety AND increased
passage, by - for example - reducing staggering time for
empty northbound tankers (now treated the same as full ones)
and devoting more attention to smaller and medium tankers.

--BUT STILL ACCIDENTS: 1) The LPG TANK FERRY sinking in
March, which closed the Bosphorus for a full day, followed by
two days of unrelated closure due to heavy fog (Ref A),was
not a weakness of the VTS, but did show the high danger of
smaller traffic, to which less attention and regulation is
applied. According to Landin, there may have been inadequate
oversight and potential corruption in allowing this old barge
to be put in use. 2) On April 3 a 244 meter container ship
and a 85 meter manganese ore cargo ship collided at the
entrance of the Dardanelles, reportedly resulting in three
deaths and closure for almost a day of the Dardannelles.
This highlights that the VTS is an effective monitoring tool,
but it has its limits in preventing accidents, and that
straits entrance zones are particularly high risk zones, as
previously identified. Investigation of the incident is
underway, but apparently the ship captains didn't or weren't
able to react to warnings given by VTS officials.

--The newly approved STRAITS NAVIGATION - ENVIRONMENTAL AND
INSURANCE LAW (Ref A) appears a good step towards applying
reasonable international standards, but the test will be
implementation and reaction of shippers. The ChevronTexcaco
mariner said that there was some ambiguity in the drafting
and intent. Landin said that almost all big tanker shippers
(including Russians) take on voluntary pilots, because they
cannot afford to be perceived as flouting highest safety
standards.

--The DARDANELLES (Canakkale) is the more significant
chokepoint than the Bosphorus, experiencing about 13 % more
traffic, due to incoming LNG tankers and oil tankers to the
TUPRAS refinery at Izmit. Although in principle all tankers
are treated the same, in effect TUPRAS and Turkish tankers
are often jumped to the head of the queue. Fortuitously, the
closure related to the LPG incident and subsequent fog
effected only the Bosphorus.

BOSPHORUS BYPASS - WAITING FOR MARKET AND OIL COMMITMENTS
-------------- --------------


3. (SBU) CHEVRONTEXACO officials repeated their case for
making progress simultaneously and separately on improved
maritime safety in the Straits and on developing the economic
rationale for bypasses, in contrast to the approach taken in
the so-called "Voluntary Principles" (Ref C). They saw a
role for USG attention and help on both. ChevronTexaco has
closely looked at many of the Bosphorus bypass proposals (in
particular trans-Thrace and Samsun-Ceyhan),but concluded
that the economic justification for investing in a bypass is
still not clear cut, although they recognized some value for
a bypass as an insurance policy.


4. (SBU) WE GOT THE ROUTE: In several speeches and private
meetings, including with visiting TDA official and
contractor, GOT and BOTAS (Turkish state pipeline company)
officials emphasized commitment to a Samsun-Ceyhan bypass
route. They stressed the oft-repeated rationale: spare
capacity at Ceyhan port (even with Iraq pipeline flowing,
they claim as much as 120 million tons spare capacity);
one-country solution; and a potential for piggy-backing on
some of BTC's right-of-way. Both BOTAS and Turkish firm
Calik Energy express serious interest and are reportedly both
carrying out separate feasibility studies. While GOT
officials insist the government is united in supporting
Samsun-Ceyhan, they continue to wait passively for the
elusive oil throughput guarantee from oil shippers.


5. (SBU) OTHER LINKAGES: GOT officials expressed strong
support for timely completion of BTC, but called for linkages
to Kazakhstan. They equally called for natural gas linkages
to Europe: 1) First, the Turkey-Greece connector underway,
with possible extension to Italy, and 2) the prospective and
larger Nabucco pipeline to central Europe (BOTAS is partner).
BOTAS targets providing transit of 15 % of Europe's natural
gas demand. Potential supply would come first from Shah
Deniz/South Caucasus Pipeline which will deliver gas via a
spur to the Turkish grid by late 2006; development and target
of a second phase is still up in the air. Conference
participants also expressed broad interest in resurrecting
schemes for potential Turkmenistan gas transit to Europe, but
lamented the abject failure of realizing the trans-Caspian
natural gas pipeline in 2001 (moreover, difficult to envision
success with the current regime). Energy DDG Mithat Rende
presented Turkey's energy strategy goals: 1) consolidate role
as transit country, 2) establish energy hub, 3) facilitate a
"fourth artery" to Europe, and 4) Protect the environment
(i.e. the Straits).


6. (SBU) MORE ON BYPASSES: All bypass promoters claim to
have "imminent" crude oil commitments to fill their
prospective lines. Thrace Development Company says it is
close to agreeing with the Russians. Calik Energy states
privately that they have commitments from the Russians and
French company Total. Many observers in Turkey are skeptical
that Russian and TNK-BP interest in the Burgos-Alexandropolos
project will go anywhere (moreover they regularly raise
negative issues with respect to that project). Some skeptics
and conspiracy theorists think it is a smoke-screen to
attempt to gain more commitment from governments. Thrace
Development, meanwhile, argued that there was a need for two,
or three, bypass pipelines. Some creative observers even
proposed a "peace pipeline" linking the Turkish Thrace Black
Sea coast and Greek Alexandropolos.

COMMENT
--------------


7. (SBU) Notably, there was no mention of the controversial
- but dormant - "Voluntary Principles on the Passage of Oil
Tankers through the Turkish Straits" (Ref C) at the
conference, even from DDG Mithat Rende, the successor to the
author and champion of the Voluntary Principles. Recent
accidents in the Straits show that even with improved
application of maritime navigation management techniques and
identified goal of maximizing safe passage, accidents can
still happen. A Bosphorus bypass would likely displace the
"safest" oil (carried or contracted by the large oil
companies),adding to the classic first mover - free rider
conundrum (who will make the first substantial investment in
a bypass?)
EDELMAN