Identifier
Created
Classification
Origin
07ANKARA1608
2007-06-25 09:10:00
CONFIDENTIAL
Embassy Ankara
Cable title:  

TURKEY - ENTHUSIASM FOR TURKENISTAN AND IRAQ GAS

Tags:  ENRG EPET PREL TU AJ RS IZ TX KZ 
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VZCZCXRO4686
RR RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHAK #1608/01 1760910
ZNY CCCCC ZZH
R 250910Z JUN 07
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 2719
INFO RUCNCIS/CIS COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHIT/AMCONSUL ISTANBUL 2925
RUEAIIA/CIA WASHDC
RHEHAAA/NSC WASHDC
RUEUITH/ODC ANKARA TU
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 001608 

SIPDIS

SIPDIS

USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK
EEB FOR A/S SULLIVAN
EUR FOR DAS BRYZA
SCA FOR DAS MANN
DOE FOR DAS HEGBURG
USTDA FOR DAN STEIN

E.O. 12958: DECL: 06/14/2017
TAGS: ENRG EPET PREL TU AJ RS IZ TX KZ
SUBJECT: TURKEY - ENTHUSIASM FOR TURKENISTAN AND IRAQ GAS

REF: A. ANKARA 1481


B. ANKARA 1421

C. ANKARA 1286

Classified By: ECON/C T. GOLDBERGER FOR REASONS 1.5 (B) AND (D)

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 001608

SIPDIS

SIPDIS

USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK
EEB FOR A/S SULLIVAN
EUR FOR DAS BRYZA
SCA FOR DAS MANN
DOE FOR DAS HEGBURG
USTDA FOR DAN STEIN

E.O. 12958: DECL: 06/14/2017
TAGS: ENRG EPET PREL TU AJ RS IZ TX KZ
SUBJECT: TURKEY - ENTHUSIASM FOR TURKENISTAN AND IRAQ GAS

REF: A. ANKARA 1481


B. ANKARA 1421

C. ANKARA 1286

Classified By: ECON/C T. GOLDBERGER FOR REASONS 1.5 (B) AND (D)


1. (C) SUMMARY: In a June 13 meeting with EUR DAS Matt
Bryza, Turkish Energy Minister Hilmi Guler gave a positive
and enthusiastic read-out of his recent trip to Turkmenistan
and Kazakhstan. Guler was confident that an off-shore
Turkmenistan-Azerbaijan connection was workable and wants
Turkey to be an active participant, but called for greater
speed, support, and activism from the United States. Guler
said he had invited the Azeris to discuss gas transit, but
they had not yet responded. Guler strongly supported a
second U.S.-Turkey-Iraq gas trilateral on the margins of
Turkey's proposed June 28-29 meeting of the Iraq Neighbors
Energy WG, but asked the USG to push for appropriate Iraqi
participation. End Summary.

-------------- --------------
Bullish on Turkmenistan, but Waiting for Knight Shining Armor
-------------- --------------


2. (C) Just returned from Turkmenistan and Kazakhstan, Guler
was enthusiastic about potential for a trans-Caspian Pipeline
from Turkmenistan. He noted that Russia and even China were
well entrenched in Turkmenistan, and said Turkmenistan was
looking for action from our side. Guler described the
Turkmen as hesitant and cautious -- "acting as if someone is
listening." Guler said that in more private meetings, his
interlocutors were candid about their concerns about Russia.
The Minister described the Turkmen and Kazakhs as waiting for
a "knight" to come to their rescue. Pointing at EUR DAS Matt
Bryza, he intoned: "You are that knight!" Guler noted that
EU Energy Commissioner Piebalgs was supportive of a
trans-Caspian pipeline from Turkmenistan and that there is a
lot of bogus talk about environmental risk for a pipeline in

the Caspian. He said the latter was nonsense because there
are already so many pipelines, and gas is much less
environmentally risky than oil.


3. (C) Bryza agreed that the time was right to move forward
on a trans-Caspian gas link from Turkmenistan, though we
needed to move carefully so as to avoid spooking Ashgabat.
He emphasized that the Russia-Kazakhstan-Turkmenistan
announcements were no cause to panic; it was a political deal
that sought to assure that Turkmenistan was able to fulfill
existing commitments to Russia, though, absent quick and
visible progress on the Southern Corridor, the announcement
could cause political damage. He said it left Turkmenistan
flexible to pursue new deals, particularly in western
off-shore areas. Bryza stressed that our policy was not to
disrupt existing contracts. He said potential linkage of the
Turkmen offshore Petronas field 60 km to Azeri ACG would be
an attractive means to create a TCP, noting that the Petronas
field had potential to be equal to Shah Deniz in reserves.
Bryza said Azerbaijan, the EU, BP, and Statoil were exploring
this idea. He noted that Turkmenistan and Azerbaijan were
setting up joint working group on Caspian oil and gas, which
could work on this project.


4. (C) Guler stressed that Turkey was in a good position to
facilitate a TCP, noting that Turkey had an existing gas
contract with Turkmenistan for provision of 16 BCM to Turkey
and 14 BCM to Europe. He explained that Turkey's domestic
pipeline grid could be used to provision gas to Europe.
Moreover, Guler said the Turkish state oil company TPAO would
like to actively participate in development of the Petronas
block potential. The Minister said it would be normal for a
Turkish company to arrange transit of gas produced to Turkey
and beyond via Azerbaijan. Bryza noted that the geology was
challenging, and would require participation of a major
company that could bring the newest technology. Guler and
Bryza agreed that our joint support was necessary and that a
TCP could feed both Nabucco and Turkey-Greece-Italy pipeline
projects, but that Turkmenistan needed to be courted
carefully.

ANKARA 00001608 002 OF 002



--------------
Turkey-Greece-Italy Interconnector
--------------


5. (C) Guler said that Turkey, Greece, and Italy were
getting close on signing an IGA. He said Greece agreed to
Turkey's need for an option to purchase up to 15% of gas
transited at a "net-back" price (though Turkey had hped to
reserve 25% of the pipeline's gas for purchase). Guler said
Italian Edison had not yet agreed. Bryza noted that Edison
VP Poti told him Edison wanted to assure sufficient phase one
quantity and timing (around 11.5 BCM). It was important,
Bryza continued, to ensure the investors would be assured of
sufficient volume to meet their project financing
commitments. Guler said that we needed to work together with
the producers in Azerbaijan to ensure that they factor in
Turkey's own growing demand for natural gas for domestic
distribution and power.

--------------
Getting Azeris and Turks to Talk
--------------


6. (C) Guler again expressed his willingness to meet with
Azeri partners to discuss gas transit. He emphasized that he
had personally invited Natiq Aliyev, but he had not received
a response. Bryza said that SOCAR Head Rovnag Abdullayev and
Natiq Aliyev had been designated interlocutors. He also
understood that Abdullayev would be in Istanbul on June 15
(which we independently confirmed),however Guler said he was
unaware of this visit. Guler was optimistic that they would
talk. He said Turkey was ready to nominate volumes under the
first year of the bilateral supply contract, but that Turkey
and Azerbaijan had to agree on the date when the one-year
period begins and the price for the second and third years.
Moreover, Turkey would want to ensure that the full volume of
gas was flowing through the pipeline before the clock would
start ticking to mark the year during which Turkey would be
able to purchase gas at a preferential price. Guler
criticized EU countries for talking directly to Iran ("over"
Turkey). Guler said Turkey was in contact with Iran, but
they were in arbitration over gas price.

--------------
Second Trilateral Working Group on Iraqi Gas
--------------


7. (C) Bryza said that Turkish MFA Iraq Coordinator Cellikol
had informed him earlier in the day that he supported
planning a second Iraq-Turkey-United States gas meeting on
the margins of the Iraq Neighbors Energy Working Group now
targeted for June 28-29. Guler strongly endorsed this idea,
and asked that the USG to work hard with the GOI to ensure
appropriate Iraqi participation (central government and gas
expertise).


8. (C) COMMENT: Guler and Bryza agreed on the need to
explore how to move forward quickly but quietly with
Turkmenistan on a trans-Caspian gas. Bryza said he
understood that Turkey had to maintain good relations with
Russia. Guler acknowledged pressure from Russia for a second
Blue Stream; in parting, he told Bryza not to worry about
Blue Stream II, but he emphasized his need for alacrity and
support from the U.S. We will have to continue to press the
Turks and Azeris to get together for long-delayed talks on
short and long-term gas transit to lay a foundation for a
southern gas corridor to Europe.


9. (U) This cable was cleared by EUR/DAS Matt Bryza.

Visit Ankara's Classified Web Site at
http://www.state.sgov.gov/p/eur/ankara/

WILSON