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