C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001033

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STATE FOR SCA/CEN, EUR/CARC, EUR/RUS, EUR/ERA, EUR/WE,
EUR/AGS, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF
COMMERCE FOR HUEPER

E.O. 12958: DECL: 09/25/2017
TAGS: PREL EPET PBTS UK AJ TX
SUBJECT: TURKMENISTAN: PRESIDENT SHOWS SOME LEG ON
TRANS-CASPIAN PIPELINE AND DELIMITATION

Classified By: Charge Richard E. Hoagland for reasons 1.4(B) and (D).


1. (C) SUMMARY: During a September 20 meeting with UK
Minister of Energy Malcolm Wicks, President Berdimuhamedov
for the first time expressed Turkmenistan's support for a
Nabucco pipeline, and even promised to guarantee Turkmen gas
reserves for the Nabucco project. This formulation, which
would likely require that Turkmen gas transit a southern
corridor pipeline, represents a substantial step forward in
terms of expressing support for a Trans-Caspian pipeline
(TCP) or other arrangement. He also stated that a TCP would
require only bilateral agreement between Turkmenistan and
Azerbaijan, rather than insisting on agreement of all five
Caspian littoral states, showing marked movement since
earlier this summer. We believe that the biggest remaining
hurdle to delimitation is Turkmenistan's lack of
understanding of and confidence in models for delimitation,
and believe that providing the delimitation training that
Turkmenistan requested from the U.S. Trade and Development
Agency two weeks ago could help. END SUMMARY.


2. (SBU) UK Minister of Energy Malcolm Wicks' September
19-20 visit to Ashgabat, the first ministerial-level visit
from the UK in nine years, was directed at demonstrating to
all that the UK wants to put relations with Turkmenistan on a
"proper level," according to UK Ambassador to Ashgabat Peter
Butcher during a September 24 readout for NATO and EU
Ambassadors plus Georgia's and Ukraine's. During his visit,
Wicks met with President Gurbanguly Berdimuhamedov, Deputy
Chairman of the Cabinet of Ministers/Foreign Minister Rashit
Meredov, and Deputy Chairman of the Cabinet of Ministers for
Oil and Gas Tachberdi Tagyev and Turkmengas Chairman
Yagshygeldi Kakayev. Wicks' predecessor, Lord Truscott,

originally planned to make the visit, but responsibility
devolved to Wicks following the recent government changes in
London.

BERDIMUHAMEDOV EXPRESSES SUPPORT FOR NABUCCO


3. (C) Butcher reported that Wicks' meeting with
Berdimuhamedov had been positive, particularly on southern
corridor pipelines. When Wicks asked the president about the
potential for Turkmenistan to sell gas through the Nabucco
pipeline, Berdimuhamedov, who had never before even mentioned
the Nabucco pipeline, went well beyond his usual formulation
that a Trans-Caspian pipeline (TCP) remains on the agenda,
saying that, Turkmenistan is ready to create conditions for
the Nabucco project to begin. He also told Wicks that
Turkmenistan is ready to guarantee reserves that would be
available for the Nabucco project. (COMMENT:
Berdimuhamedov's ability to discuss the Nabucco pipeline in
fact may have been prompted by his recent meeting in Ashgabat
with Austrian Minister of Economy and Labor Martin
Bartenstein, who visited the region to stump for Nabucco.
END COMMENT.)

...BUT CRITICIZES LACK OF CLARITY IN EUROPEAN ENERGY POLICY


4. (C) Notwithstanding the president's stated interest in
seeing Turkmenistan's gas flow through the Nabucco pipeline,
he criticized the lack of clarity in the European position on
this pipeline and about Europe's energy policy in general.
As he has in meetings over the summer with U.S. visitors,
Berdimuhamedov accused the European countries of talking, but
without providing the "substantive and practical" plans that
Turkmenistan needs to make a decision and take action. Wicks
responded that he would take Berdimuhamedov's thoughts back
and seek to ensure a clearer presentation of European policy
on these issues.

ASHGABAT 00001033 002 OF 002



PRESIDENT STATES TCP ONLY NEEDS BILATERAL AGREEMENT


5. (C) According to Butcher, Berdimuhamedov also told Wicks
that, while Turkmenistan still has delimitation issues with
Azerbaijan and Iran, those issues are being dealt with.
Turkmenistan and Azerbaijan have formed a joint commission to
work on these issues, which has made good progress and would
next meet in Baku the week of October 24. The president also
stated that a TCP does not require agreement by all five
Caspian littoral states and could be constructed on the basis
of a bilateral agreement between Azerbaijan and Turkmenistan.
Foreign Minister Meredov, whom other diplomats have
indicated does break into the discussion if the president is
going off the reservation, was silent throughout these
comments.


6. (C) Meredov separately told Wicks that Turkmenistan will
continue to sell its gas at the border. However, on
delimitation, he asked, where is the border in this case, and
then listed a number of different models for delimiting sea
and lake borders and sharing resources. Butcher also told
the Charge although Wicks had traveled to Baku following his
meetings in Ashgabat, he had not conveyed any messages from
leaders in Ashgabat.


7. (C) COMMENT: Turkmenistan's delimitation policy clearly
is evolving. As recently as June, Berdimuhamedov was still
discussing the need to receive agreement from all five
Caspian littoral states for the construction of a TCP. We
are encouraged by his willingness to state now that only
bilateral agreement is needed, and believe that the major
factor still hampering further flexibility on Turkmenistan's
side is a lack of knowledge and confidence. If the U.S.
Trade and Development Agency can follow up on Turkmenistan's
recent request for delimitation training for the State Agency
for Management and Use of Hydrocarbon Resources, we may find
even more willingness within the government to consider new
alternatives. END COMMENT.
HOAGLAND