Identifier
Created
Classification
Origin
08ISTANBUL575
2008-11-18 07:36:00
CONFIDENTIAL
Consulate Istanbul
Cable title:  

MINISTER GULER WELCOMES US OFFER OF HELP IN

Tags:  ENRG EPET TU 
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P 180736Z NOV 08
FM AMCONSUL ISTANBUL
TO RUEHC/SECSTATE WASHDC PRIORITY 8596
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEUITH/ODC ANKARA TU PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEBAAA/DOE WASHDC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 ISTANBUL 000575 

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: 10/31/2018
TAGS: ENRG EPET TU
SUBJECT: MINISTER GULER WELCOMES US OFFER OF HELP IN
TURKEY'S ENERGY SECTOR

REF: ISTANBUL 553

Classified By: AMBASSADOR WILSON FOR REASONS 1.4 (B) AND (D)

C O N F I D E N T I A L SECTION 01 OF 02 ISTANBUL 000575

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: 10/31/2018
TAGS: ENRG EPET TU
SUBJECT: MINISTER GULER WELCOMES US OFFER OF HELP IN
TURKEY'S ENERGY SECTOR

REF: ISTANBUL 553

Classified By: AMBASSADOR WILSON FOR REASONS 1.4 (B) AND (D)


1. (C) Summary. On Oct 30, a high-level, interagency
delegation led by Department of Energy Acting Deputy
Secretary Kupfer discussed Turkey's energy needs and the
Southern Corridor with Energy Minister Guler. The delegation
described U.S. suggestions on ways we can help Turkey. Guler
responded positively and in detail. He was upbeat about
progress on the Southern Corridor and said the GOT had
reached agreement with Azerbaijan to buy a "certain amount"
of Shah Deniz Phase II gas. Turkey continues to pursue
negotiations with Turkmenistan for gas. Guler expressed
frustration with European partners whose divergent interests
are causing delay on the Nabucco project. End summary.


2. (C) Guler welcomed the delegation's offer to send a
technical evaluation team in mid-December to identify areas
ripe for cooperation in the energy sector. The GOT is ready
to cooperate and "all data" would be made available
to the team. In addition, Guler suggested the team work with
the PM's Investment Promotion Agency headed by
Alpaslan Korkmaz. An expedited financing procedure for
energy sector projects would be very much appreciated.
Turkey needs USD 120 billion of investment in the energy
sector by 2020, the bulk of that for electricity.


3. (C) The last few months have been productive, Guler said.
The GOT has had positive meetings with Azeri and Turkmen
leaders and reached agreement with Azerbaijan for a certain
amount of gas (no amount given). Guler said if Shah Deniz
Phase II is as big as estimates suggest, then there will be
sufficient gas for Greece and Italy too. Nabucco is also
moving forward. The draft intergovernmental and host country
agreements are now being circulated to Nabucco partner
companies for their approval.


4. (C) U.S. support for the development of the Southern
Corridor is still important for achieving diversity of supply
because some Caspian states are "still under the influence of
Russia," Guler said. Turkmenistan prefers a 60-70 km
pipeline connecting Turkmen and Azeri off-shore platforms, as

opposed to a trans-Caspian pipeline. Warming relations
between Azerbaijan and Turkmenistan make such a connection
more feasible. Turkey continues to seek an upstream position
in Turkmenistan, perhaps partnering with firms already there.
If Turkey can develop its own gas, it could take the lead in
getting gas to flow westward. Guler asserted Turkey's right
to buy Turkmen gas under a 1990s contract
for 16 bcm. The Turkmen conditions are a guarantee of
pipeline security and the resolution of status of the Caspian
Sea. The contested Serdar-Kapaz field is a major obstacle
for delimitation and cannot be resolved without 3rd party
intervention.


5. (C) Guler repeated a familiar refrain about the
difficulties of working with the EU. While the EU has blamed
Turkey for lack of progress on Nabucco, the EU's own actions
and the opaque intentions of members states like Austria,
Hungary, and Germany towards Russia are delaying this
project. Because of the lack of transparency in the gas
market, gas source countries are powerful. Guler also
complained that continual EU personnel changes for the
Nabucco project cause delay. He welcomed the visit of
European Energy Commissioner Piebalgs to Ankara on Nov 6, but
added the EU should include Turkey's energy needs in its own
demand calculations.


6. (C) Guler highlighted a few specific opportunities for
U.S. investment. The GOT will soon tender Afsin Elbistan
plants C, D, and E with a combined total of 3,000 MW. The
GOT is also pushing ahead with a second nuclear tender for
5,000 MW for the Sinop region. (Note: Experts at the
Ministry of Energy have told us geologic and environmental
studies of the project will not be ready soon. End note.)
Both projects will have a 15 year power-purchase guarantee.
Turkey should also attract manufacturing opportunities in the
energy sector. Guler had previously discussed establishing a
wind turbine factory in Turkey with the CEO of General

ISTANBUL 00000575 002 OF 002


Electric. Such a facility could be used for increased
regional sales to the Middle East and Caspian states.


7. (C) Comment: Guler responded positively to the U.S. team
and recognized the welcome help it provides for Turkey's
energy agenda. His comment about Shah Deniz volumes for
Turkey as well as Greece and Italy may mean Turkey will
prioritize the Turkey-Greece-Italy pipeline as the first
major line to Europe. Agreement between Turkey and
Azerbajian on Shah Deniz II volumes for Turkey is almost
certainly not as worked out as Guler suggested, but there may
be movement. End comment.


8. (U) The delegation has cleared this cable.





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