TURKEY MITIGATES THE EFFECTS OF RUSSIAN GAS CUTS

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SENSITIVE
SIPDIS

EEB FOR SPECIAL ENVOY FOR EURASIAN ENERGY GRAY
EEB FOR ENERGY COORDINATOR MANN
EUR FOR DAS BRYZA

E.O. 12958:N/A
TAGS: ECON ENRG TU IR
SUBJECT: TURKEY MITIGATES THE EFFECTS OF RUSSIAN GAS CUTS

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1. (SBU) Summary. On January 6, the GOT announced Russian gas
flowing to the West Line (a gas pipeline originating in Russia and
transiting Ukraine) was cut off. In public statements, Energy
Minister Guler and PM Erdogan sought to reassure the Turkish public
the GOT is taking measures to deal with the crisis and that
consumers will not be affected. Turkey plans to make up for the
deficit by buying additional gas from Russia (via a direct pipeline
called Blue Stream),by buying LNG on the spot market and other
measures. Iran offered to sell additional gas to Turkey but Guler
declined. End summary.

GOT Tells Public Not to Worry About Gas Cuts
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2. (U) Below are excerpts from a press conference held by Energy
Minister Guler on January 6. Guler said Russian gas flowing from
the West Line to Turkey (a line that flows through Ukraine, Moldova,
Romania and Bulgaria) was completely cut as of January 6. Turkey
was first notified about a cut to 32 mcm (million cubic meters),
then to 17 mcm, after which the gas was completely cut. Turkey is
compensating for this loss with several actions including: (1)
increased daily flows from the Blue Stream pipeline from 40 mcm to
48 mcm; (2) usage of gas from Turkey's underground storage facility;
and (3) purchase of additional liquefied natural gas (LNG) cargos.
Additionally, the Ministry of Energy has activated clauses in some
contracts with power generators that require generators to switch
from gas to alternative fuels in the event of a gas shortage.
Turkey continues talks with Russia. Prime Minister Erdogan will talk
to his counterpart, if needed. Other countries' ministers are also
involved. Turkey wants to resolve this problem quickly. The GOT has
the situation under control and does not expect the cut off to
continue for long. The EU and the countries along the pipeline are
also working with Gazprom to resolve the problem.


3. (U) Following Guler's press conference, PM Erdogan made a
statement to the press. He confirmed the cut off of Russian gas via
the West Line but said this is not a problem for Turkey. The GOT
has taken precautionary measures to make up for gas cuts, so gas to
customers and industry would be continued without interruption.
Meanwhile, Turkey continues negotiations with Russia, Ukraine and
Bulgaria. The PM expressed confidence that the issue will be
resolved promptly.

Iran Offers Additional Gas Supply for Turkey
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4. (U) Iranian Economic Counselor in Turkey Ahmad Noorani told
reporters Iran was ready to provide additional gas to Turkey to make
up for the loss from the Russian gas cut. In his press conference,
Guler confirmed Iran's offer but said for the moment, the amount of
gas Turkey receives from Iran is sufficient, adding that Turkey will
buy more gas from Iran if needed.

Gas to Greece Remains Constant But Will Not Increase
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5. (U) Commenting on Turkey's gas flow to Greece, Guler said the
amount of gas flow to Greece remains unchanged. Reuters reported
that Greece asked Turkey to increase the gas flow through the
Turkey-Greece interconnector, which Turkey reportedly declined to
do.



6. (U) Speaking to the press, Ukraine's Ambassador to Turkey Sergei
Korsunsky denied allegations that Ukraine shut down the valves to
Europe, and claimed his country had sufficient stock of gas to last
until April. Korsunsky noted that Ukraine sent a letter to Russia on
January 5 to resolve the problem. Ukraine hopes to renew gas
contracts with Russia as soon as possible. Both sides need
political will and effort to resolve the problem. Expressing his
disappointment that Turkey too was affected by the gas cut,
Korsunsky argued Ukraine (would not unilaterally cut of gas to
Europe).


7. (SBU) Informal advisor to Guler Faruk Demir assured us the
Ministry is well-prepared for this gas cut. The GOT has been
working on crisis scenarios since November and had even planned for
a scenario in which gas from both the Russian West Line and the
Iranian line were cut. Demir expects the problem will continue for
10-15 days, during which Turkey would be able to manage.


8. (SBU) Comment: Having dealt with Iranian gas cutoffs for the

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last two winters, the GOT is confident it can mitigate the effects
of the current gas crisis. By our calculations, Turkey now has a
gas deficit of 27 mcm. The longer the crisis continues the more
expensive and difficult it may be for Turkey to make up this
difference.