Identifier | Created | Classification | Origin |
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06ANKARA6736 | 2006-12-22 15:56:00 | CONFIDENTIAL | Embassy Ankara |
VZCZCXRO4421 RR RUEHAG RUEHBC RUEHDBU RUEHDE RUEHIHL RUEHKUK RUEHROV DE RUEHAK #6736/01 3561556 ZNY CCCCC ZZH R 221556Z DEC 06 ZDK DUE NUM SVCS FM AMEMBASSY ANKARA TO RUEHC/SECSTATE WASHDC 0415 INFO RUCNCIS/CIS COLLECTIVE RUCNRQ/IRAQ COLLECTIVE RUCNMEM/EU MEMBER STATES RUEHIT/AMCONSUL ISTANBUL 1847 RUEAIIA/CIA WASHDC RHEHAAA/NSC WASHDC RUEUITH/ODC ANKARA TU RUEHNO/USMISSION USNATO 5365 RHMFISS/CDR USEUCOM VAIHINGEN GE RUEHBS/USEU BRUSSELS RUEKJCS/SECDEF WASHINGTON DC RHEBAAA/DEPT OF ENERGY WASHINGTON DC RUCPDOC/DEPT OF COMMERCE WASHDC |
C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 006736 |
1. (C) SUMMARY: In a December 22 meeting with Ambassador, Energy Minister Guler reiterated Turkey's willingness to help Georgia meet its natural gas needs this winter, which was apparently discussed during President Saakishvili's meeting with PM Erdogan. However, Guler said Georgia was pressuring Turkey to sign an MOU that would apparently unconditionally commit Turkey to the redirection of its Shah Deniz gas to Georgia. In exchange, Georgia would undertake to provide in future years electricity to Turkey. Guler expressed serious reservations about making such a commitment now given the uncertainties about near-term Shah Deniz gas, Georgia's high price for electricity, and questions about Russian deliveries to Turkey. After consultation with the Georgian Ambassador to Turkey, Ambassador advised Guler that the next step for Turkey should reflect the agreements Erdogan and Saakashvili reached, but he declined to endorse the MOU at this time. End Summary. 2. (C) Guler summarized PM Erdogan's meeting with Saakashvili. Guler said Turkey remains ready to redirect a share of its 2007 Shah Deniz gas to Georgia and Azerbaijan, should such gas be available. He was aware of recent news that the deliveries will be delayed. Guler said he was ready to postpone the start of the Shah Deniz first year contract period to July 2007 as a reasonable burden sharing approach. He complained, however that the Azeris were rejecting this and seeking to put too much of the burden on Turkey. He thought President Aliyev was sincere, but that his ministers and the Consortium were passing the ball, ducking responsibility, and acting as if claiming ownership of all the Shah Deniz gas. 3. (C) Guler also noted Turkey's dependence on Russia for gas and the possibility for supply cuts or other delivery "problems". Moreover, the Minister stressed that Turkey was entering an election year and would have an extremely difficult time justifying to the public why it gave up cheap gas ($120 ptcm) in exchange for expensive alternative gas (up to $300 ptcm) from Russia or other sources. In addition, BOTAS faced financial difficulties, and the political opposition and government auditors were vigilant in watching the government's energy costs. 4. (C) Lamenting the Shah Deniz production delays, Guler said Turkey faced a number of negative effects on its natural gas balance for this winter. He cited uncertainty with respect to Shah Deniz, Iran, underground storage, and Algerian LNG supplies. On the other hand, Guler understood Georgia's plight. He said the President described the situation in his country as critical, including risk of civil war, and he reviewed Georgia's supply problems in detail. 5. (C) Guler said Georgia was trying to convince Turkey to sign an MOU that would commit Turkey to the redirection to Georgia of its contracted SD volumes in return for future Georgian electricity supplies. Guler felt that this was unrealistic both because there is no Shah Deniz gas now and Georgian electricity appears to be expensive and uncertain. Guler noted technical problems that would hinder Georgian electricity deliveries and observed that Georgia is at present an electricity importer from Turkey. He hoped the U.S. would contribute to a solution for Georgia's winter problems. Ambassador said some ideas are under discussion in Washington, but there has been no conclusion. 6. (C) Guler asked whether the U.S. thinks signing an MOU along the lines suggested by Georgia is wise. Turkey would prefer not to sign until Shah Deniz supplies and the commercial arrangements become clear. Could Ankara tell the ANKARA 00006736 002.3 OF 002 Georgian that the U.S. thinks a delay to mid-January makes sense? 7. (C) Ambassador applauded Turkey's leadership role on regional gas issues. He stressed that all parties must do what they can to ensure the survival of Georgia, which is vital to the region and achievement of the southern gas corridor. In the short term, Georgia must be helped through the next several months; in the medium term, arrangements must be agreed to allocate the SD volumes effectively; and in the long term, countries must agree on a comprehensive transit regime to facilitate larger SD development and additional gas deliveries to Turkey and Europe. All these objectives would be pursued with attention to the inter-relation among them. 8. (C) Ambassador subsequently spoke with the Georgian Ambassador, who confirmed Tiblisi's MOU proposal. He said that Erdogan and Saakashvili agreed during their private meeting December 21 in Istanbul on the redirection of Turkey's share of SD gas. Guler and the Georgian minister came into the room at the end, where they reportedly heard this commitment and an instruction to work out the details. Now, explained the Georgian Ambassador, the Turkish bureaucracy is balking. The MOU is essential for Georgia. With temperatures dropping in Georgia and 2006 supplies about to run out, the public is anxious. A return from Turkey without any commitment on gas would be demoralizing and would greatly harm Georgia's negotiating position with Russia. He appealed for U.S. support. 9. (C) Ambassador subsequently passed the word back to Guler that the U.S. supports Georgia, Turkey, and Azerbaijan on issues related to Shah Deniz gas. The issue of whether or not to sign Georgia's proposed MOU is a matter for Turkey and Georgia. While we were not part of the discussions between PM Erdogan and President Saakashvili, the right step now is to take action that reflects the agreement that the two of them reached last July. Ambassador relayed the same message to the Georgian Ambassador, observing that he was reluctant to endorse an MOU whose contents we don't know, but that he would try to be helpful by aiming Turkey at the results of the talks between Erdogan and Saakishvili (whose content is also unclear to us). Visit Ankara's Classified Web Site at http://www.state.sgov.gov/p/eur/ankara/ WILSON |