Identifier
Created
Classification
Origin
05ANKARA7078
2005-12-02 08:22:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ankara
Cable title:  

TURKEY-RUSSIA-ITALY: BLUE STREAM FANFARE AND ADO

Tags:  EPET ENRG EWWT SENV TU IT RU 
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UNCLAS SECTION 01 OF 02 ANKARA 007078 

SIPDIS

USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK
DOE FOR CHARLES WASHINGTON

SENSITIVE

EUR ALSO FOR DAS BRYZA

E.O. 12958: N/A
TAGS: EPET ENRG EWWT SENV TU IT RU
SUBJECT: TURKEY-RUSSIA-ITALY: BLUE STREAM FANFARE AND ADO

REF: (A) ANKARA 6769, (B) ANKARA 6310

Sensitive But Unclassified.

UNCLAS SECTION 01 OF 02 ANKARA 007078

SIPDIS

USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK
DOE FOR CHARLES WASHINGTON

SENSITIVE

EUR ALSO FOR DAS BRYZA

E.O. 12958: N/A
TAGS: EPET ENRG EWWT SENV TU IT RU
SUBJECT: TURKEY-RUSSIA-ITALY: BLUE STREAM FANFARE AND ADO

REF: (A) ANKARA 6769, (B) ANKARA 6310

Sensitive But Unclassified.


1. (SBU) SUMMARY: Despite Turkey's hopes to spin the
official opening of the Blue Stream natural gas pipeline
(under the Black Sea from Russia; constructed by Italian
firm ENI) into tangible support for other energy
corridor/hub dreams, the leaders departed Turkey without
further concrete commitments. While ENI had announced
one week before its plans to develop GOT's Samsun-Ceyhan
oil pipeline proposal (ref A),the Turks were unable to
get firm commitments from the Russians and Italians on
this project or other gas projects that would promote
development of Ceyhan as an energy hub. End Summary.


2. (SBU) The Blue Stream natural gas pipeline was
officially inaugurated on November 17, 2005 at Samsun,
Turkey, with the participation of Turkish Prime Minister
Tayyip Erdogan, Russian President Vladimir Putin and
Italian Prime Minister Silvio Berlusconi. The $3.5
billion, 1,265 km pipeline crosses under the Black Sea at
depths up to 2,150 meters and began operating in 2003.
Currently the pipeline is moving 3.2 BCM of gas per year,
but is intended to eventually carry up to 16 BCM per year
for a 25-year term as operations gradually ramp up.
Russian Gazprom is the main owner/operator of the
pipeline. Italian ENI built the pipeline and Turkish
BOTAS owns and operates the Samsun-Ankara segment.

-------------- --------------
You Say More Gas and I say Oil Bypass - Talk is Cheap
-------------- --------------


3. (SBU) As in four previous high level meetings between
Erdogan and Putin, the summit announcements were long on
wish list areas of cooperation but short on detailed
commitments and time-frames. The Turks hoped for
tangible support for the Samsun-Ceyhan oil pipeline as a
long-favored Bosphorus "bypass" route (competing most
directly with a Russia-favored Burgos-Alexandropolos
Bulgaria-Greece bypass),as well as commitments to extend
the gas pipeline along a similar route to Ceyhan - with
hoped for gas-processing facilities and gas re-export
rights. The Russians were non-committal on the oil

pipeline, saying that they would have to do further
analysis (and/or a separate feasibility study in the new
year, but without committing to funding a full-blown
study). Instead, President Putin announced that Blue
Stream capacity should be doubled to 30 BCM. As for
Berlusconi, he failed to deliver any energy commitments;
rather, he announced that not only Turkey, but Russia as
well, should join the EU.


4. (SBU) In a press conference, Energy Minister Guler
was careful to emphasize that the Russians were not
against Samsun-Ceyhan oil pipeline. He forecast that
there would soon be an inter-governmental agreement
between Turkey/BOTAS and Russia/Gazprom for the
commitment of oil throughput in the project. Guler
stated that technical feasibility studies would be
carried out in 1-2 months. On natural gas, he also
spoke optimistically about cooperation on an LNG terminal
at Ceyhan, but there was not a firm agreement.


5. (SBU) GOT MFA DDG Energy Mithat Rende, speaking
November 28 with EmbOffs, was persistently upbeat on
Samsun-Ceyhan prospects. He claimed that PM Berlusconi
had expressed support at the Blue Stream ceremony. Rende
admitted that the Russians had said that they would put
off another look until 2006 (Note: they reportedly
continue to favor Burgos-Alexandropolos. End Note.) He
asserted that for the first time the Russians recognized
tanker passage in the Turkish Straits as a problem.
Rende made a new point that the GOT aimed to reduce
Bosphorus tanker traffic from current 140 mm tons p.a. to
60 mm tons, without any details on how they would arrive
at this significant reduction.


6. (SBU) Chevron reps briefed EmbOffs on November 30 on
their year and a half analysis of Bosphorus bypass
options. Their conclusion is that - while they remain
open to all options - there is not a clear economic
justification for a bypass. Front-runners would be
Burgos-Alexandropolos or trans-Thrace. The Chevron reps
observed that the Turkish dogged position on Samsun-
Ceyhan is imbued with prestige visions of Ceyhan as
energy hub and political-military concerns about reliance
on the Aegean Sea for shipping. They called for clear
focus on maritime shipping safety (including greater
vetting of Black Sea ports),and they expressed concern
about the GOT adopting "manipulation" to accomplish goals
to reduce tanker traffic.


7. (SBU) COMMENT: It is not clear why the official
inauguration for Blue Stream was delayed two years from
first operation. Turkey was clearly hoping to deliver
other commitments with the splash, but appeared to fail
to obtain further firm impetus to its long favored Samsun-
Ceyhan oil pipeline. A number of major oil companies are
looking seriously at the project, but the elusive
throughput commitment is not in the bag. Some observers
attribute the late Blue Stream inauguration to
embarrassment over the notorious lack of transparency of
the deal. Others express concern that the Russians are
seeking to create additional control and pipelines
through Turkey and Europe to prevent the Caspian/Central
Asia - Central Europe Nabucco project from materializing.
While Russia is a natural and important energy partner
for Turkey- and has shown some flexibility on Turkey's
gas surplus from take-or-pay commitments - Turkey
purchases well over 60% of its natural gas from Russia,
so it is risky to increase its dependence.


8. (SBU) The oft-floated idea of an international
public-private conference on shipping safety in the
Turkish Straits (i.e., not necessarily focused only on
bypass) could be a productive way forward. The challenge
would be to gain broad and appropriate participation and
avoid pre-canned positions (perhaps multiple meeting;
perhaps hosted in Turkey by a third party, like the IEA).
GOT has long championed an idea like this. Chevron is
open to it.
McEldowney