TURKISH ENERGY MINISTER'S MEETING WITH NIYAZOV ON

C O N F I D E N T I A L ASHGABAT 000108 SIPDIS SIPDIS SECSTATE FOR DAS BRYZA, EUR/CACEN, SA DAS GASTRIGHT E.O. 12958: DECL: 01/24/2016 TAGS: ECON ENRG EPET GG KZ PGOV PREL RS TX UP US SUBJECT: TURKISH ENERGY MINISTER'S MEETING WITH NIYAZOV ON TCP: "A POSITIVE START" Classified By: Ambassador Tracey Ann Jacobson for reasons 1.4 (b) and ( d) ¶1. (C)Turkish Ambassador Hakki Akil provided Ambassador a readout of Turkish Energy Minister Mehmet Hilmi Guler 1/19 meeting with President Niyazov. Guler told Niyazov that Turkey was ready to pursue seriously a Trans-Caspian Pipeline (TCP),and that he himself was prepared to come to Ashgabat every 15 to 30 days to advance the issue. Guler said that the timing was now right for such a project: the Europeans are more interested in diversification of gas supply, and the United States is also ready to advance the project. Turkey has companies prepared to participate in a consortium. ¶2. (C) According to Akil, Guler made clear to Niyazov that Western companies and countries had previously believed that Niyazov only discussed TCP in order to have an additional bargaining chip in his gas price negotiations with Russia. The West now needs a signal that Niyazov is serious. To this end, it would be critical that Niyazov not sign a longer term gas agreement, or one for more that 30 bcm, with Russia. Niyazov had said previously that he wouldn't sell "more than 25%" of his gas to Russia, but then mentioned a figure of 50 bcm. Akil interjected that given Turkmen gas production and export levels, a contract for 50 bcm would preclude further discussions of a TPC. Guler also told Niyazov that an intergovernmental agreement with Azerbaijan would be necessary before proceeding further to line up a consortium and get political support. ¶3. (C) Turkish Businessman (and potential TPC investor) Ahmed Calik sat in on the meeting on the GOTX side. At Niyazov's request, he stayed behind, and told Niyazov that he thought Turkey was extremely serious about moving forward with a TPC. Niyazov reportedly said he also believed this "for the first time." Niyazov told Guler that he would "try to avoid" signing a contract during his trip to Russia, postponing a new agreement until "September or October." ¶4. (C) Akil believes (note: and we agree) that the next order of business is to find out what Niyazov promised in Moscow this week. After that, Akil wants to see a joint U.S. -Turkish effort to help facilitate an intergovernmental agreement with Azerbaijan, and then the building of a consortium. He noted that involvement by the EU, even a political signal from the Commission that it would support a TCP project, would be helpful. ¶5. (C) Comment: What Niyazov did or did not promise in Russia will be critical. He will certainly have to have given Putin something -- he fears that failure to "cooperate" sufficiently with Russia could be detrimental to his regime/well being. But he also appears to be interested in pursuing a TPC again, as he said during DAS Bryza's recent visit. For the kremlinologically minded, we note that Niyazov permitted his Minister for Gas and Oil and Minister for Electricity to attend the official dinner at the Turkish Ambassador's residence on Friday -- the only other time these ministers have been permitted to "socialize" with foreigners in recent memory was our own July 4 reception last year. JACOBSON