Identifier
Created
Classification
Origin
08ANKARA1353
2008-07-29 11:26:00
CONFIDENTIAL
Embassy Ankara
Cable title:
TURKEY: EC ENERGY DELEGATION VISIT YIELDS NO
how-toVZCZCXRO8453 RR RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR DE RUEHAK #1353/01 2111126 ZNY CCCCC ZZH R 291126Z JUL 08 FM AMEMBASSY ANKARA TO RUEHC/SECSTATE WASHDC 6975 INFO RUCNCIS/CIS COLLECTIVE RUEHZL/EUROPEAN POLITICAL COLLECTIVE RUEHGB/AMEMBASSY BAGHDAD 1291 RUEHIT/AMCONSUL ISTANBUL 4522 RUEUITH/ODC ANKARA TU RUEAIIA/CIA WASHDC RHEHAAA/NSC WASHDC RUCPDOC/DEPT OF COMMERCE WASHDC RHEBAAA/DEPT OF ENERGY WASHINGTON DC
C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 001353
SIPDIS
EEB FOR A/S SULLIVAN
SPECIAL ENVOY FOR EURASIAN ENERGY GRAY
EEB FOR ENERGY COORDINATOR MANN
EUR FOR DAS BRYZA
E.O. 12958: DECL: 07/29/2018
TAGS: ENRG EPET TU IZ
SUBJECT: TURKEY: EC ENERGY DELEGATION VISIT YIELDS NO
PROGRESS
REF: A. ANKARA 1172
B. BRUSSELS 952
C. ANKARA 1286
Classified By: Economic Counselor Dale Eppler for reasons 1.4 (B) and (
D)
C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 001353
SIPDIS
EEB FOR A/S SULLIVAN
SPECIAL ENVOY FOR EURASIAN ENERGY GRAY
EEB FOR ENERGY COORDINATOR MANN
EUR FOR DAS BRYZA
E.O. 12958: DECL: 07/29/2018
TAGS: ENRG EPET TU IZ
SUBJECT: TURKEY: EC ENERGY DELEGATION VISIT YIELDS NO
PROGRESS
REF: A. ANKARA 1172
B. BRUSSELS 952
C. ANKARA 1286
Classified By: Economic Counselor Dale Eppler for reasons 1.4 (B) and (
D)
1. (C) Summary. Heinz Hilbrecht, Director for Energy
Security at the EC Directorate General for Energy
Transportation led a technical-level delegation to Ankara for
talks with Turkey's Nabucco Coordinator Osman Goksel on July
17-18. The talks were to prepare the groundwork for the
visit of Commissioner Piebalgs at the end of the month by
achieving agreement on two key issues: (1) the opening of
Turkey's gas transit corridor without conditionals (i.e.
without a percentage of gas being diverted to Turkey's
domestic market) and (2) adoption of the EU's gas pipeline
transmission rules. Ankara-based EU Commission staff
described the talks as "disappointing." Agreement was not
reached on either issue and the Piebalgs visit has been
postponed. End summary.
2. (C) Through several negotiating sessions with Turkey
Nabucco Coordinator Osman Goksel (ref a and b),the EU
thought Turkey was ready to move beyond its original proposal
to withhold 15% of gas transiting Turkey. In return, the EU
promised to cooperate with Turkey and others to establish a
Caspian Development Company (CDC),a consortium of private
companies designed to accelerate upstream investment by
offering European gas purchase guarantees. According to
Ankara EU Commission staffer Burcin Pamuksuz, who attend the
delegations' talks, Goksel told Hilbrecht he is very
supportive of the CDC concept but it does nothing to address
Turkey's short or medium term gas needs. Goksel continued to
insist that withholding 15% of transit gas is the best
option. On the issue of implementing EU transmission rules,
Goksel rejected the proposal on principle. Since Turkey is
not in the EU, it is not required to follow EU rules. Goksel
pressed Hilbrecht and others to explain why it wouldn't work.
Pamuksuz said the talks were "back at square one" and since
no progress was made, EU Commission Piebalgs canceled the
trip to Ankara that had been scheduled for the end of July.
3. (C) In a separate meeting, Goksel told us he is
frustrated with the EU. They confirm Turkey's legitimate
need for gas but propose a solution that that won't deliver
gas until 10-15 years in the future. Since the talks were
launched following the visit of EU Nabucco Coordinator van
Aartsen to Ankara on February 14, Turkey has been asking the
EU to present an alternative proposal to the 15% reserve
formula. None has been forthcoming. According to Goksel, EU
Ambassador to Turkey Mark Perini appealed to Goksel to
consider the larger strategic vision for the project -- to
table the request for 15% of transit gas in lieu of a
bilateral agreement with Azerbaijan for domestic gas. Perini
cautioned Goksel that Turkey's demand to buy all of Shah
Deniz Phase II gas could doom the southern corridor to
failure, which is in no one's interest. Goksel said if the
choice is between securing Europe's energy supply or
Turkey's, he would choose Turkey's.
4. (C) When pressed to describe the objectionable aspects
of the EU transmission rules, Goksel could not answer. He
simply said Turkey should not be asked to follow the rules of
a club to which it is not a member and may not ever be. He
speculated that Azerbaijan and Georgia would have similar
objections to implementing EU rules.
5. (C) Comment: In ref c, Perini told us the EU and Turkey
face similar circumstances: rising demand for gas and a need
for diversity. The latest EU-Turkey talks highlight a
potential divergence when it comes to timing. With the CDC
idea, the EU has put on the table an offer to help Turkey
(and Europe) achieve longer term security of supply; however,
Turkey has more acute needs with projected shortages in 2012.
Unsatisfied with the EU proposal, Turkey continues to use
transit to leverage a deal on gas supply.
ANKARA 00001353 002 OF 002
Visit Ankara's Classified Web Site at
http://www.intelink.sgov.gov/wiki/Portal:Turk ey
WILSON
SIPDIS
EEB FOR A/S SULLIVAN
SPECIAL ENVOY FOR EURASIAN ENERGY GRAY
EEB FOR ENERGY COORDINATOR MANN
EUR FOR DAS BRYZA
E.O. 12958: DECL: 07/29/2018
TAGS: ENRG EPET TU IZ
SUBJECT: TURKEY: EC ENERGY DELEGATION VISIT YIELDS NO
PROGRESS
REF: A. ANKARA 1172
B. BRUSSELS 952
C. ANKARA 1286
Classified By: Economic Counselor Dale Eppler for reasons 1.4 (B) and (
D)
1. (C) Summary. Heinz Hilbrecht, Director for Energy
Security at the EC Directorate General for Energy
Transportation led a technical-level delegation to Ankara for
talks with Turkey's Nabucco Coordinator Osman Goksel on July
17-18. The talks were to prepare the groundwork for the
visit of Commissioner Piebalgs at the end of the month by
achieving agreement on two key issues: (1) the opening of
Turkey's gas transit corridor without conditionals (i.e.
without a percentage of gas being diverted to Turkey's
domestic market) and (2) adoption of the EU's gas pipeline
transmission rules. Ankara-based EU Commission staff
described the talks as "disappointing." Agreement was not
reached on either issue and the Piebalgs visit has been
postponed. End summary.
2. (C) Through several negotiating sessions with Turkey
Nabucco Coordinator Osman Goksel (ref a and b),the EU
thought Turkey was ready to move beyond its original proposal
to withhold 15% of gas transiting Turkey. In return, the EU
promised to cooperate with Turkey and others to establish a
Caspian Development Company (CDC),a consortium of private
companies designed to accelerate upstream investment by
offering European gas purchase guarantees. According to
Ankara EU Commission staffer Burcin Pamuksuz, who attend the
delegations' talks, Goksel told Hilbrecht he is very
supportive of the CDC concept but it does nothing to address
Turkey's short or medium term gas needs. Goksel continued to
insist that withholding 15% of transit gas is the best
option. On the issue of implementing EU transmission rules,
Goksel rejected the proposal on principle. Since Turkey is
not in the EU, it is not required to follow EU rules. Goksel
pressed Hilbrecht and others to explain why it wouldn't work.
Pamuksuz said the talks were "back at square one" and since
no progress was made, EU Commission Piebalgs canceled the
trip to Ankara that had been scheduled for the end of July.
3. (C) In a separate meeting, Goksel told us he is
frustrated with the EU. They confirm Turkey's legitimate
need for gas but propose a solution that that won't deliver
gas until 10-15 years in the future. Since the talks were
launched following the visit of EU Nabucco Coordinator van
Aartsen to Ankara on February 14, Turkey has been asking the
EU to present an alternative proposal to the 15% reserve
formula. None has been forthcoming. According to Goksel, EU
Ambassador to Turkey Mark Perini appealed to Goksel to
consider the larger strategic vision for the project -- to
table the request for 15% of transit gas in lieu of a
bilateral agreement with Azerbaijan for domestic gas. Perini
cautioned Goksel that Turkey's demand to buy all of Shah
Deniz Phase II gas could doom the southern corridor to
failure, which is in no one's interest. Goksel said if the
choice is between securing Europe's energy supply or
Turkey's, he would choose Turkey's.
4. (C) When pressed to describe the objectionable aspects
of the EU transmission rules, Goksel could not answer. He
simply said Turkey should not be asked to follow the rules of
a club to which it is not a member and may not ever be. He
speculated that Azerbaijan and Georgia would have similar
objections to implementing EU rules.
5. (C) Comment: In ref c, Perini told us the EU and Turkey
face similar circumstances: rising demand for gas and a need
for diversity. The latest EU-Turkey talks highlight a
potential divergence when it comes to timing. With the CDC
idea, the EU has put on the table an offer to help Turkey
(and Europe) achieve longer term security of supply; however,
Turkey has more acute needs with projected shortages in 2012.
Unsatisfied with the EU proposal, Turkey continues to use
transit to leverage a deal on gas supply.
ANKARA 00001353 002 OF 002
Visit Ankara's Classified Web Site at
http://www.intelink.sgov.gov/wiki/Portal:Turk ey
WILSON