TURKISH AMBASSADOR POSITS GAZPROM PLANS TO

C O N F I D E N T I A L ASHGABAT 000140

SIPDIS

SIPDIS

SECSTATE FOR DAS BRYZA, EUR/CACEN, SA DAS GASTRIGHT

E.O. 12958: DECL: 01/27/2016
TAGS: ECON ENRG EPET GG KZ PGOV PREL RS TX UP US
SUBJECT: TURKISH AMBASSADOR POSITS GAZPROM PLANS TO
ESTABLISH A MONOPOLY IN EUROPE


Classified By: Ambassador Tracey Ann Jacobson for reasons 1.4 (b) and (
d)


1. (C) During a lunch he hosted for Georgian Ambassador
Petriashvili, Ukrainian Ambassador Mayko, and U.S.
Ambassador, Turkish Ambassador Hakki Akil argued passionately
(with the help of visual aids) that Gazprom is intent on
establishing a monopoly of gas supply to Europe. Akil argued
that Gazprom is doing its utmost to gain control over the
"upstream" -- ie., gobbling up Central Asian gas supplies
(witness recent deals in Uzbekistan and Kazakhstan and
approaches to Niyazov to buy all Turkmen gas). Further,
Gazprom is pursuing pipeline purchases to control the
midstream, and is even pushing deals in Europe to buy into
distribution networks to influence up the downstream. Akil
believed that a secondary goal of Russian pipeline projects
(Baltic, Yamal 2) is to bypass Ukraine. Akil, Mayko and
Petriashvili agreed that Russia would use any such monopoly
to "blackmail" Europe politically as well as economically,
but lamented that the EU either did not yet recognize the
danger, or was unwilling to confront it given economic links
with Russia. Akil was particularly concerned that Russia was
preparing to make some political concessions to Turkey (eg.,
agreeing to approve the UN SecGen's Cyprus report, which it
is currently blocking) in order to get approval to double the
capacity of Blue Stream -- which Akil argued would kill any
real chances for a new Trans Caspian project.


2. (C) Akil identified Kazakhstan and Turkmenistan as the
only potential "weak points" in Gazprom's strategy. Mayko
and Petriashvili opined that Kazakhstan was already "lost"
and said "only the USG" could give Niyazov the support he
would require to break away from Russia. Ambassador reviewed
the problems with the first TCP, and noted that even if the
situation now was more positive, it would be difficult for
the USG to give Niyazov the real strategic partnership he
believes he needs to balance Russian pressure without more
progress in other areas of the bilateral relationship (eg.,
human rights) and a more compelling indication of his
interest in the project. Ambassador noted that Secretary
Rice has spoken quite clearly on the unacceptability of
Russia's use of energy policy to pursue its political agenda,
and also that the USG remains interested in multiple export
routes for Turkmen gas and diversification of gas supplies
for Europe. However, the USG has not yet committed its
resources, and cannot commit U.S. business, to a single
trans-Caspian option.


3. (C) Mayko left the lunch early for a meeting with Foreign
Minister Meredov to receive the GOTX's formal response to
Ukrainian President Yushchenko's proposal of a
Trans-Caspian/Black Sea export option to Ukraine; he had
"preliminary information" that the response would be negative
(ie., "we are interested and will study further.") Akil
argued that even a rejection of the somewhat grandiose
Ukrainian proposal would not imply an unwillingness to pursue
the smaller TCP-only option. Mayko hoped to receive a
readout of Niyazov's meetings with President Putin this week,
which he promised to share (Note: the GOTX, to our
knowledge, has not given any mission a readout of these
meetings.)


4. (C) Comment: Petriashvili said during a meeting with
Georgian President Saakashvili yesterday, the Vice Chair of
the Russian Duma, in reference to the current gas crisis in
Georgia, said: "We already warned you. Either you are on
your knees to us, or your people will freeze every winter."
Regardless of the veracity of this anecdote, the Russians
have already made clear that they're willing to use their
control of energy supplies to pursue their political agenda,
at least within the near abroad. The implications of Russia
establishing this kind of influence in Europe are worrying.
What role Niyazov will play in the development of this game
remains unclear.




JACOBSON