TURKMENISTAN: RECEPTIVE TO TURKISH ENERGY

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001180 SIPDIS STATE FOR SCA/CEN; EEB E.O. 12958: DECL: 09/05/2018 TAGS: PGOV EINV EPET ENRG EIND IR TU TX SUBJECT: TURKMENISTAN: RECEPTIVE TO TURKISH ENERGY MINISTER'S ENERGY EXPORT IDEAS Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d). ¶1. (C) SUMMARY: Turkish Energy Minister Hilmi Guler's visit laid the groundwork for expanding the Turkish role in Turkmenistan's oil and gas industry and also could strengthen and enhance the two countries' electricity relationship. It is possible that Turkmen officials were quite receptive to the Turkish proposals on bilateral energy cooperation. Although the proposals lacked detail, they may appear attractive to Turkmenistan as alternative energy export options. In response to a question by Tagiyev regarding what gas export pipeline he "preferred" in terms of exporting to the West, Tagiyev said that, given Turkmenistan's policy of selling gas at the border, he preferred "the land border" ostensibly meaning via Iran. END SUMMARY. ¶2. (U) Turkish Minister of Energy and Natural Resources Hilmi Guler met with President Berdimuhamedov and other top energy and construction officials during his September 2-3 visit during a trip that also included stops in Iran and Azerbaijan. Guler was accompanied by representatives from Turkish Petroleum Corporation (TPC),Turkish Petroleum Pipeline Corporation, and the Turkish Electricity Trading Company. ¶3. (C) Turkish Deputy Chief of Mission Tolga Orkun told poloff that Guler discussed a number of issues with President Berdimuhamedov, who was generally receptive to them. He asked that Turkmenistan give Turkish energy companies a block in the Caspian that they could explore and develop, but would not identify specific blocks of interest. He asked the government to reconsider its current ban on foreign participation in onshore energy projects, and said that Turkish companies were ready to deliver proposals to help boost production. ¶4. (C) During a generally uninformative meeting with Deputy Cabinet Minister for Oil and Gas Tachberdi Tagiyev, Guler asked Tagiyev what gas export pipeline he "preferred" in terms of exporting to the West. Tagiyev hesitated a moment, then said that given Turkmenistan's policy of selling gas at the border, he preferred "the land border" ostensibly meaning via Iran. ¶5. (C) Both the president and senior Turkmen electricity officials showed great interest in Guler's proposals on bilateral electricity cooperation. Guler indicated that there was interest among Turkish companies in building two natural gas power plants in Turkmenistan, perhaps in the western half of the country, near the fields. Guler suggested that if and when the plants were built, Turkmenistan could potentially sell electricity to Europe. ¶6. (C) Guler and the president specifically discussed combined cycle power plants, each capable of producing 1200-1500 MegaWatts of electricity. The Turkish Petroleum Corporation was willing to develop an offshore block jointly with Turkmenistan. Orkun noted that although it wasn't explicitly discussed, it was possible that TPC envisioned that natural gas produced in the chosen block would be routed to one of the power plants. The question of refining or processing the natural gas before reaching a power plant, however, was not discussed. ¶7. (C) When poloff asked Orkun what infrastructure the electricity would transit to reach Europe, he claimed not to know. (NOTE: Turkey currently purchases electricity from Turkmenistan, via Iran's electricity network. Turkmen officials have recently indicated that they want to raise the price of their export electricity. END NOTE.) During the meeting with the president, however, Guler had suggested that it would be easier, from a geopolitical perspective, to build an electricity network across the Caspian, than to build an ASHGABAT 00001180 002 OF 002 oil or gas pipeline. ¶8. (C) COMMENT: While it was clear that Guler was making proposals on hydrocarbon and electricity cooperation that were certainly in Turkey's interest, they were likely well received by Turkmen officials, who would like the idea of westward export options for both commodities. The greater question, however, will be how these proposals look when they are more detailed, and who will invest in the projects. END COMMENT. CURRAN