TURKMENISTAN/HUNGARY: PM GYURCSANY PUSHES

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 000871 SIPDIS STATE FOR SCA/CEN, EUR/CARC, EUR/RUS, EEB PLEASE PASS TO USTDA DAN STEIN ENERGY FOR EKIMOFF/THOMPSON COMMERCE FOR HUEPER E.O. 12958: DECL: 07/11/2018 TAGS: PREL EPET HU TX SUBJECT: TURKMENISTAN/HUNGARY: PM GYURCSANY PUSHES NABUCCO WITH BERDIMUHAMEDOV REF: A. ASHGABAT 0778 ¶B. BUDAPEST 0691 Classified By: CDA Richard E. Hoagland: 1.4(b),(d) ¶1. (C) SUMMARY: Hungarian ambassador Gyorgy Busztin, resident in Tehran, told Charge and DCM July 10 that Hungarian Prime Minister Ferenc Gyurcsany's eight hours with President Berdimuhamedov on July 9 was dominated by a single issue: the Nabucco pipeline. While Busztin indicated that Berdimuhamedov said he would be able to fill Nabucco -- after he solves some problems -- Turkmenistan's state-run media took a more nuanced line, stating only that a "broad basis for successful joint efforts is opening up." Even if Berdimuhamedov made the commitment to the Hungarians, Turkmenistan must overcome some major obstacles before it can act on the president's words. END SUMMARY. ¶2. (C) The possibility that Gyurcsany might visit Turkmenistan July 9 to improve bilateral contacts, including on Nabucco, had first been raised just three weeks earlier by Hungary's new Ambassador-at-Large for the Nabucco Pipeline Project, Mihaly Bayer (Ref A). During his stay, Gyrurcsany had a marathon six-hour meeting with Berdimuhamedov, followed by excursions to see Turkmenistan's Ahal Teke horses at the hippodrome and the Russian Bazaar in downtown Ashgabat. ¶3. (C) Hungarian ambassador Gyorgy Busztin, resident in Tehran, told Charge and DCM July 10 that there had been only one substantive issue on the agenda: the Nabucco pipeline. According to the ambassador, Berdimuhamedov told his visitor that Turkmenistan supported the Nabucco pipeline, but will first "need to solve some problems." Gyurcsany also invited Berdimuhamedov to attend a "Nabucco Summit" in Budapest at a still-to-be-determined date in the summer of 2009. Turkmenistan's state-run media provided a more cautious read-out of the meeting, stating merely that the two leaders had exchanged views regarding the establishment of the long-term partnership in the energy sector and had concurred that a "broad basis for successful joint efforts is opening up." ¶4. (C) The two leaders reportedly got along very well, with Gyurcsany appealing to Turkmen national pride in its Ahal Teke horses with his wish to see the horses in person. According to Busztin, when they arrived at the hippodrome, the Hungarians noticed large portraits of Berdimuhamedov and Russian President Medvedev left over from the July 4-5 Medvedev visit and pointed it out. When the party left the hippodrome, however, Meredov's monumental portrait had been replaced by one of a delicate Ahal Teke horse. Berdimuhamedov took his guests to the Russian Bazaar, which had been spruced up espcially for the visit. Vendors were in new white shirts and no one was permitted to buy the abundant, glistening fruits and vegetables. The Hungarians were amused but not put off by the Potemkin Village feel of the market, which normally is just a regular, teeming, outdoor market. ¶5. (C) COMMENT: The extent to which Berdimuhamedov might be playing Russia and Europe against each other in the ongoing courtship for Turkmenistan's natural gas is not entirely clear. EU-TACIS representative in Ashgabat Michael Wilson told Charge July 10 that, contrary to other reports, he had been told that Medvedev and Berdimuhamedov had reached a "gentlemen's agreement" for Turkmenistan to sell Gazprom 80-100 billion cubic meters of natural gas in 2010 at a price of $210 per thousand cubic meters. If true, Wilson added, this report would make the trans-Caspian pipeline -- needed for getting Turkmenistan's gas to Nabucco -- uneconomical. For Turkmenistan to deliver on any of these purported ASHGABAT 00000871 002 OF 002 commitments, however, it will need to find a way of quickly resolving a host of other issues, including low gas production (Turkmenistan's total planned gas production volume for 2008 is only 81.5 billion cubic meters) and a lack of adequate transportation pipelines in either direction. END COMMENT. HOAGLAND