TURKISH SUPPORT FOR CASPIAN GAS FOR EUROPE

C O N F I D E N T I A L ANKARA 002277 SIPDIS SIPDIS DOE FOR INTERNATIONAL AFFAIRS E.O. 12958: DECL: 04/20/2016 TAGS: ENRG EPET TU GR IT SUBJECT: TURKISH SUPPORT FOR CASPIAN GAS FOR EUROPE REF: A. ANKARA 2044 ¶B. ANKARA 2042 Classified By: DCM Nancy McEldowney. Reasons 1.4 (b) and (d) ¶1. Summary. In an April 19 meeting, Turkey's senior MFA energy expert said Turkey was feeling pressure from Russia, but was supportive of the regional gas ideas laid out by EUR DAS Bryza during his April 4-6 meetings in Ankara (refs). Rende thought the best way to make quick progress was to form a working group including all parties that could lead to the development of a shared "vision statement," possibly in time for the July 13 inauguration of the BTC pipeline in Ceyhan, Turkey -- which Rende claimed is now set. He hoped Energy Minister Guler had not been misread as not being supportive of such an initiative. Meanwhile, there has been no movement toward creation of a technical working group to assess Georgia's request for Shah Deniz gas. End Summary. -------------- -------------- Regional Gas: Turkey Supports But Can't be in Front -------------- -------------- ¶2. (C) Rende said Turkey generally shared Bryza's view of the urgency of getting an Azeri commitment to fill the Turkey-Greece Interconnector (TGI),but recommended not taking Greek, Azeri, or Shah Deniz Consortium (BP) statements at face value. He said the Greeks are "desperate" for Russia's support for the Burgos-Alexandropolous oil pipeline and BP has an interest in promoting Azeri as opposed to Kazakh or Turkmen gas that it doesn't control. The position of the Azeri government is unclear. (Rende did not have a read-out of President Sezer's recent meetings in Baku.) ¶3. (C) In order to develop a broadly shared assessment of the situation, Rende strongly supports the formation of an Italian-Greek-Turkish-Azeri-Georgian working group, with the participation of the United States and the Consortium. He suggested Istanbul as a possible site for a meeting in May or June, but thought Rome could also be a reasonable venue. Rende said he could foresee leaders at the July 13 BTC opening ceremony in Ceyhan signing on to a "vision statement" on regional gas analogous to the "Ankara Declaration" that foresaw the BTC oil pipeline. (Rende said he had urged Foreign Minister Gul to attend the May 18 Transatlantic Energy Conference in The Hague, but the Dutch embassy informed us April 19 that Gul would not be able to travel for medical reasons. MFA recommended Energy Minister Guler as an alternative.) ¶4. (C) As for Turkey, Rende opened the conversation by noting that "some of Turkey's institutions" were feeling strong pressure from Russia. Suggesting that these institutions included the Energy Ministry, Rende said Minister Guler had tried to be frank and honest with Bryza. He was very supportive of Bryza's ideas, but wanted to convey that Turkey could not be alone and out in front in standing up to Russian pressure. Fearing this positive intent might have been lost in translation, Rende explained that given Turkey's current dependence on Russian gas, it needs support and cover from the United States and others. Again saying that he hoped Guler had not been misunderstood, Rende said U.S. support for the Samsun-Ceyhan pipeline was important in this respect. At the same time, Rende said he and the Foreign Ministry are forcefully opposed to an expansion of the Blue Stream pipeline from Russia. Blue Stream I was a mistake that could not be repeated, he claimed. Guler is also looking for U.S. support for his proposal to bring Iraqi gas to Ceyhan. On the other hand, learning of a U.S. funded feasibility study for bringing Kazakh gas to the Baku-Tblisi-Erzurum line was "the best news ever." -------------- Georgian Gas: Still Waiting for Working Group -------------- ¶5. (C) Rende said that Georgia had not picked up on Turkey's suggestion that a technical working group including Turkey, Georgia and the Shah Deniz Consortium assess Georgia's request for Shah Deniz gas. Instead, the Georgians continued to press for a "political decision" at a ministerial meeting. He said that Turkey wanted to be helpful and did not want to see Georgia "fall into the hands of Gazprom." Thus, Turkey had offered hydropower and electricity exports. Gas was also possible, but Georgia was "spoiled" and not willing to discuss the issue on its economic and technical merits, probably in expectation of unreasonable price discounts. -------------- BTC Opening and Overages -------------- ¶6. (C) Rende said July 13 was the set date for the BTC opening in Ceyhan, whether or not Prince Andrew is available. The tentative plan was to fly leaders from Istanbul to Adana in the morning, and then travel by helicopter to nearby Ceyhan. After a two-hour event at the port facility, participants would return to Istanbul for a dinner hosted by President Sezer at the Dolmabahce Palace. He remained hopeful that President Bush could participate, perhaps en route to the G-8 Summit in Russia. ¶7. (C) The Foreign Ministry, Rende said, is not involved in the dispute between BOTAS and BTC over allocation of cost overruns. He said Minister Guler remained firmly convinced that BP's demands were "maximalist" and that BOTAS was in the right. He agreed, however, that it would not be in anyone's interest to pursue formal dispute resolution and acknowledged that Guler would require senior political cover (from the PM, he said) for a settlement. -------------- Comment -------------- ¶8. (C) Guler is in the difficult position of managing Turkey's energy relationship with Russia, and Rende, speaking from the remove of the Foreign Ministry, was undoubtedly trying to spin the energy minister's views the right way. Still, Guler has long been a strong proponent of diversification of gas supplies to Turkey and via Turkey to Europe as a counterweight to Russian and Iranian hegemony. He will not want to be out in front, but we should be able to work with him, including at the upcoming Hague meetings, and using the cover of a working group that includes all the parties. Visit Ankara's Classified Web Site at http://www.state.sgov.gov/p/eur/ankara/ WILSON