wikileaks ico  Home papers ico  Cables mirror and Afghan War Diary privacy policy  Privacy
IdentifierCreatedClassificationOrigin
08ROME1432 2008-11-25 07:26:00 CONFIDENTIAL Embassy Rome
Cable title:  

READOUTS ON ITALIAN ENERGY TALKS IN MOSCOW AND

Tags:   ECON ENRG PREL 
pdf how-to read a cable
VZCZCXRO8839
OO RUEHAG RUEHROV RUEHSR
DE RUEHRO #1432/01 3300726
ZNY CCCCC ZZH
O 250726Z NOV 08
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1217
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE IMMEDIATE
RUEHAK/AMEMBASSY ANKARA IMMEDIATE 3288
RUEHKB/AMEMBASSY BAKU IMMEDIATE 0115
RUEHMO/AMEMBASSY MOSCOW IMMEDIATE 4479
RUEHFL/AMCONSUL FLORENCE IMMEDIATE 3310
RUEHMIL/AMCONSUL MILAN IMMEDIATE 9677
RUEHNP/AMCONSUL NAPLES IMMEDIATE 3471
RUEHBS/USEU BRUSSELS IMMEDIATE 4698
					  C O N F I D E N T I A L SECTION 01 OF 02 ROME 001432 

SIPDIS

EEB FOR SE GRAY
EEB FOR DAS HENGEL
EEB FOR AMBASSADOR MANN
EUR FOR DAS BRYZA

E.O. 12958: DECL: 11/24/2018
TAGS: ECON ENRG PREL
SUBJECT: READOUTS ON ITALIAN ENERGY TALKS IN MOSCOW AND
IZMIR

REF: ROME 1308

ROME 00001432 001.2 OF 002


Classified By: Deputy Chief of Mission Elizabeth Dibble for reasons 1.4
b, d and e



1. (C) Summary: PM Berlusconi discussed energy issues with
Russian and Turkish leaders during recent bilateral summits
in Moscow and Izmir. The Italians signed a nuclear research
cooperation agreement with Rosatom; we are told this
agreement has little significance. The GOI once again failed
to get the Russians to give ENI a written partnership
agreement on the South Stream project. At the Izmir summit,
Italy urged the Turks to allow Azeri gas to flow West to
Italy and Greece in the TGI pipeline project -- the Turks
said they needed to make sure that their domestic gas needs
are met before considering TGI. End Summary.



--------------------------



--------------------------


Italo-Russian Nuclear Agreement, Still No ENI-GAZPROM South
Stream Deal


--------------------------



--------------------------





2. (C) Ambassador Mancini, Diplomatic Advisor to Italian
Energy Minister Claudio Scajola, gave EconOffs a readout of
the energy issues discussed at the recent November 6
Italy-Russia summit in Moscow and the November 12
Italy-Turkey summit at Izmir. While in Moscow, Scajola
initialed an agreement with Rosatom's Director Sergey
Kirienko, described on the Italian Ministry of Economic
Development website as directed towards "collaboration in the
realization of third generation nuclear reactors and for the
study, planning and development of a fourth generation
reactor prototype." Mancini downplayed this, calling it a
"minor" agreement aimed at creating an Italian-Russian
working group for research collaboration on fourth generation
nuclear energy power plants. Mancini did not mentioned the
cooperation on third generation nuclear technology (possibly
because he does not understand the technological distinctions
between third and fourth generation). He emphasized that
this agreement (which he said is a one-page document) will
not open the door for Russian construction of nuclear power
plants in Italy, nor will it pave the way for Italian
procurement of Russian-designed plants. (Comment: Mancini's
description of the nuclear cooperation agreement as being of
little importance tracks with what Scajola's Energy Advisor
had told us last October: that it would not be an important
agreement. See Ref. End comment)



3. (C) According to Mancini, ENI is frustrated due to little
progress on the South Stream Black Sea pipeline project. ENI
wants a written partnership agreement from Gazprom specifying
a contract to build the gas project, and rights to sell South
Stream gas in Central and Eastern European markets (see Ref).
ENI apparently feels left out because it sees Gazprom working
with the companies of the countries in the projected path of
South Stream without bringing ENI into these contract
negotiations. Scajola once again failed to get ENI the
written agreement it wants.



--------------------------



--------------------------


No Deal Yet With Turkey on TGI Transit: Turkey Will Take Care
of Own Gas Needs First


--------------------------



--------------------------





4. (C) Minister Scajola reportedly pushed the Turks hard on
TGI during the November 12th Berlusconi-Erdogan summit,
arguing that it is an important EU energy diversification
project, that the USG is in favor of it and that the Russians
don't object (because it is small, i.e. smaller than
Nabucco). Scajola also argued that the project would reduce
Italian and Turkish energy dependence on the Russians.
Mancini said that the Turks responded by pointing to their
growing need for natural gas, and he noted that the Turks
"didn't exactly say they wanted to buy all of the Azeri gas"
but told the Italians that "after they have taken care of
their own needs, they would then look at TGI." Mancini
commented that the Turks could use ALL of the Azeri gas for
their own domestic needs. Mancini assessed that the Turks
were not really negative on TGI, but are "trying to get the

ROME 00001432 002.2 OF 002


most that they can" out of the evolving project. In an
effort to win the Turks over, Mancini implied that Scajola is
playing the EU membership card -- he is asking the Turks to
"be a good European partner." Mancini admitted that while
the Azeri gas is very important to the Turks, for Italy it is
"not pivotal" since it would account for only about 5 percent
of Italy's gas needs. He also said that EU Commissioner
Piebalgs's continued touting of Nabucco is "irritating to
Italy."



5. (C) Mancini said the Italians would keep working on the
Turks. He said that Berlusconi can be very persuasive, and
that the PM had a very good and cordial personal chemistry
with Erdogan. He added that Azerbaijan President Aliev will
be in Rome on November 26th. Mancini also mentioned a
Ministerial in Athens on the 28th as another opportunity to
further advance TGI negotiations. In the end, he seemed a
bit pessimistic, noting that there are many possibilities for
the Azeri gas: 1) the Azeris might not sell it; 2) the
Russians could buy all the output; 3) they might sell it all
to the Turks; or 4) TGI might get a sufficient quantity to
make the project worthwhile.



--------------------------


COMMENT


--------------------------





6. (C) We were pleased to once again hear that the
Italo-Russian nuclear agreement doesn't mean much, but
Mancini's effort to present it as a strictly fourth
generation research collaboration agreement (when it is in
fact third and fourth generation) is somewhat worrisome.
Given the close relationship between Berlusconi and Putin,
all agreements of this kind warrant close monitoring.



7. (C) We were also interested to learn of ENI's continued
Gazprom/South Stream contract woes. We have often raised the
subject with the Italians of politicized Russian business
dealings. The South Stream "disappointment" may serve to
drive home the point that ENI's eager embrace of Russian
energy projects may have limited payback.



8. (C) On TGI, in October Scajola's energy advisor told SE
Gray that the Turks would not be the problem (see Ref), and
implied that the Italians could win their cooperation. It
now appears that more work remains to be done in this area.
Post will monitor and report on the outcomes of the November
26th Berlusconi-Aliev Rome meeting. End Comment.
SPOGLI