This record is a partial extract of the original cable. The full text of the original cable is not available.

221519Z Feb 06

UNCLAS ANKARA 000860 
 
SIPDIS 
 
STATE FOR E, EB/CBA, EB/ESC AND EUR/SE 
USDOE FOR CHARLES WASHINGTON 
USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ENRG EINV EPET TU
SUBJECT:  TURKEY-EGYPT SIGN GAS DEAL: FLOW TARGETED TO START 
IN 2007 
 
 
Sensitive But Unclassified.  Please handle accordingly. 
 
¶1.  (SBU) Turkey announced a new gas deal with Egypt, 
heralding its contribution for diversification of supply and 
ability to seed export of gas to Europe.  In light of over- 
reliance on Russia, and recent disruptions from Iran, this 
deal is viewed as a small, but positive step.  End summary. 
 
¶2. (SBU) On February 15 Energy Minister Hilmi Guler and 
Egypt Oil Minister Sami Fehmi signed an MOU to establish a 
50/50 joint venture company to transport and market Egypt 
gas in Europe by 2007.  The company to be established will 
be named Tergas, and will carry 2- 6 BCM natural gas to 
Europe through Turkey.  The two governments had signed a 
protocol for transmission of Egyptian natural gas to Europe 
through Turkey back in March 2004.  The pipeline will be 323 
km long, 93 km of this in Turkey. 
 
¶3. (SBU) Making a press statement following the signing 
ceremony in Ankara, Minister Guler stressed the importance 
of this agreement in diversifying Turkey's energy sources 
and said Turkey and Egypt could include other partners in 
the project in the future.  Guler said the two governments 
were planning to hold a tri-partite meeting in Egypt in 
early March, with the participation of the Syrian Energy 
Minister, as a result of which Syria could become a partner 
to Tergas.  Making remarks on the same occasion, Egyptian 
Oil Minister Fehmi confirmed the two parties' willingness to 
include more partners in the company, and said Romania and 
Syria would likely be future partners in this project.  The 
two ministers did not comment on the price of the Egypt gas, 
but said it would be a competitive price. 
 
¶4. (SBU) State Pipeline Company BOTAS' Strategic Planning 
Department Head Cenk Pala told Econ Couns in a February 17 
meeting that this contract was the first to provide Turkey 
with marketing rights in Europe (along with the import 
contract with Azerbaijan).  Pala said the projected capacity 
of the pipeline was 6- 8 BCM, and a possible additional 2 
BCM from Syria.  Pala mentioned the reluctance on the 
Turkish side to include Syria as a partner to this project, 
considering the political uncertainties regarding this 
country.  Pala said Turkey and Egypt agreed to limit Syria's 
participation to a transit fee paid to this country. 
 
¶5. (SBU) Comment: Although the amount of gas flow through 
the Egypt-Turkey pipeline will constitute a minor share in 
Turkey's gas imports, it is important that the contract 
gives Turkey re-export flexibility and it comes from a new 
source.  Enthusiasm for this contract may also stem from 
criticism of winter gas shortages experienced by Turkey, for 
which the GOT blamed contracts signed by previous 
governments.  End Comment. 
 
Wilson