Identifier
Created
Classification
Origin
08ASHGABAT170
2008-02-04 11:04:00
CONFIDENTIAL
Embassy Ashgabat
how-toVZCZCXRO8744 PP RUEHAG RUEHBI RUEHCI RUEHLH RUEHPW RUEHROV DE RUEHAH #0170 0351104 ZNY CCCCC ZZH P 041104Z FEB 08 FM AMEMBASSY ASHGABAT TO RUEHC/SECSTATE WASHDC PRIORITY 0200 INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE RUCNCIS/CIS COLLECTIVE RUCNMEM/EU MEMBER STATES COLLECTIVE RUEHAD/AMEMBASSY ABU DHABI 0236 RUEHAK/AMEMBASSY ANKARA 3331 RUEHBJ/AMEMBASSY BEIJING 1147 RUEHKL/AMEMBASSY KUALA LUMPUR 0046 RUEHKO/AMEMBASSY TOKYO 1016 RUEHIT/AMCONSUL ISTANBUL 1585 RHMFISS/CDR USCENTCOM MACDILL AFB FL RUEAIIA/CIA WASHDC RHEBAAA/DEPT OF ENERGY WASHDC RUCPDOC/DEPT OF COMMERCE WASHDC RUEATRS/DEPT OF TREASURY WASHDC RHEFDIA/DIA WASHDC RUEKJCS/JOINT STAFF WASHDC RHEHNSC/NSC WASHDC RUEKJCS/SECDEF WASHDC RUEHVEN/USMISSION USOSCE 2177
C O N F I D E N T I A L ASHGABAT 000170
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HEUPER
E.O. 12958: DECL: 02/04/2018
TAGS: PREL ECON EPET IR TU TX
SUBJECT: IRAN'S NATURAL GAS WOES
REF: A. ASHGABAT 0007
B. ASHGABAT 0075
Classified By: CHARGE RICHARD E. HOAGLAND FOR REASONS 1.4 (B) AND (D).
C O N F I D E N T I A L ASHGABAT 000170
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HEUPER
E.O. 12958: DECL: 02/04/2018
TAGS: PREL ECON EPET IR TU TX
SUBJECT: IRAN'S NATURAL GAS WOES
REF: A. ASHGABAT 0007
B. ASHGABAT 0075
Classified By: CHARGE RICHARD E. HOAGLAND FOR REASONS 1.4 (B) AND (D).
1. (C) Iran has no gas to sell to customers and carries on
gas negotiations with various countries in an attempt to show
it is not isolated, Turkish Ambassador Hakki Akil told the
Charge during a February 1 lunch. In a discussion that
covered a number of Caspian and Central Asian energy issues
(septels),Akil said Iran does not produce enough gas to
fulfill its commitments to Turkey, let alone to any new
customers. He said Iran produces 90 bcm/year and uses 50 bcm
to inject into oil fields. Much of the remaining gas is used
for domestic consumption. Consequently, Iran does not
produce enough gas for export. Negotiations dealing with
Nabucco, or with India and Pakistan, Akil asserted, are
simply "political." Since there is not enough gas, Iran
simply strings along its negotiating partners. Then it finds
a problem that forces the negotiating process to start over
from zero.
2. (C) Akil said Turkmenistan's cut-off of gas to Iran since
the beginning of this year did not have a direct impact on
Iranian gas supplies to Turkey. (COMMENT: Turkmenistan
halted transportation of gas to northern Iran via the
Korpeje-to-Kurt-Kui pipeline on January 2 as part of a
hardball effort to pressure the Iranian government into a
price increase (reftel A). END COMMENT.) Turkey's gas
contract with Iran does not specify the source and,
therefore, does not distinguish between gas that originates
in Iran or Turkmenistan.
IRAN-TURKMENISTAN GAS ISSUES
3. (C) Akil said the Iranian ambassador to Turkmenistan told
him Iran is ready to pay $150 per thousand cubic meters (tcm)
of gas to Turkmenistan (vice the current price of $65 tcm).
However, for that price Iran wanted a a 20-year agreement,
which guaranteed 14 bcm per year. Akil argued that
mathematically it is impossible for Turkmenistan to supply
Iran with 14 bcm. (NOTE: The Korpeje-to-Kurt-Kui pipeline is
build to carry a maximum of 13 bcm. END NOTE.) Until
recently, Turkmenistan used 14 bcm for domestic consumption
and sold 40 bcm to Gazprom. Akil speculated that without
increasing the amount of gas sold to the Iranians, the
Turkmen did not have enough gas to fulfill its obligations to
the Chinese.
4. (C) COMMENT: We had heard previously that the Iranians
were unreliable negotiating and business partners in the oil
and gas sphere. This sheds more light on one reason why.
The Turkmen have no interest in subsidizing Iran. In fact, a
very pragmatic President Berdimuhamedov has repeatedly said
of gas transactions, "It's like a bazaar. We well, they
buy." END COMMENT.
HOAGLAND
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HEUPER
E.O. 12958: DECL: 02/04/2018
TAGS: PREL ECON EPET IR TU TX
SUBJECT: IRAN'S NATURAL GAS WOES
REF: A. ASHGABAT 0007
B. ASHGABAT 0075
Classified By: CHARGE RICHARD E. HOAGLAND FOR REASONS 1.4 (B) AND (D).
1. (C) Iran has no gas to sell to customers and carries on
gas negotiations with various countries in an attempt to show
it is not isolated, Turkish Ambassador Hakki Akil told the
Charge during a February 1 lunch. In a discussion that
covered a number of Caspian and Central Asian energy issues
(septels),Akil said Iran does not produce enough gas to
fulfill its commitments to Turkey, let alone to any new
customers. He said Iran produces 90 bcm/year and uses 50 bcm
to inject into oil fields. Much of the remaining gas is used
for domestic consumption. Consequently, Iran does not
produce enough gas for export. Negotiations dealing with
Nabucco, or with India and Pakistan, Akil asserted, are
simply "political." Since there is not enough gas, Iran
simply strings along its negotiating partners. Then it finds
a problem that forces the negotiating process to start over
from zero.
2. (C) Akil said Turkmenistan's cut-off of gas to Iran since
the beginning of this year did not have a direct impact on
Iranian gas supplies to Turkey. (COMMENT: Turkmenistan
halted transportation of gas to northern Iran via the
Korpeje-to-Kurt-Kui pipeline on January 2 as part of a
hardball effort to pressure the Iranian government into a
price increase (reftel A). END COMMENT.) Turkey's gas
contract with Iran does not specify the source and,
therefore, does not distinguish between gas that originates
in Iran or Turkmenistan.
IRAN-TURKMENISTAN GAS ISSUES
3. (C) Akil said the Iranian ambassador to Turkmenistan told
him Iran is ready to pay $150 per thousand cubic meters (tcm)
of gas to Turkmenistan (vice the current price of $65 tcm).
However, for that price Iran wanted a a 20-year agreement,
which guaranteed 14 bcm per year. Akil argued that
mathematically it is impossible for Turkmenistan to supply
Iran with 14 bcm. (NOTE: The Korpeje-to-Kurt-Kui pipeline is
build to carry a maximum of 13 bcm. END NOTE.) Until
recently, Turkmenistan used 14 bcm for domestic consumption
and sold 40 bcm to Gazprom. Akil speculated that without
increasing the amount of gas sold to the Iranians, the
Turkmen did not have enough gas to fulfill its obligations to
the Chinese.
4. (C) COMMENT: We had heard previously that the Iranians
were unreliable negotiating and business partners in the oil
and gas sphere. This sheds more light on one reason why.
The Turkmen have no interest in subsidizing Iran. In fact, a
very pragmatic President Berdimuhamedov has repeatedly said
of gas transactions, "It's like a bazaar. We well, they
buy." END COMMENT.
HOAGLAND