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

C O N F I D E N T I A L SECTION 01 OF 03 ATHENS 000546 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/24/2016 
TAGS: ENRG ECON GR GAZPROM
SUBJECT: GREECE IN GAZPROM'S SIGHTS; READOUTS ON GREECE'S 
ROLE IN WESTERN EUROPEAN ENERGY SECURITY 
 
REF: A. 2005 ATHENS 3264 
     ¶B. AHTENS 231 
     ¶C. ATHENS 342 
     ¶D. ATHENS 393 
 
Classified By: AMB Charles P. Ries, for reasons 1.4 (b) and (d) 
 
¶1.  (C) Summary:  On February 23rd, Ambassador met with 
Deputy Foreign Minister Stylianides to discuss the recent 
visit to Greece by Gazprom Chairman Alexei Miller.  A clearly 
worried Stylianides described the visit as part of a 
full-court press by Gazprom to sign Greece to a long-term 
contract for natural gas that would effectively fill the 
Turkey/Greece/Italy gas Interconnector with Russian gas. 
Additional conversations with British colleagues, the 
Chairman of the Greek natural gas concern DEPA, and others 
have revealed deep divides in Greece on whether the Russian 
offer is one that Greece cannot refuse or whether Greece has 
a viable opportunity to diversify their natural gas sourcing, 
both for domestic consumption, as well as for transit through 
to Italy.  Stylianides asked Ambassador for USG assistance in 
sorting out the facts of the Russian offer, as well as 
understanding the natural gas situation in Azerbaijan. 
Embassy recommends that early visits to Greece by intel 
community briefing team and a senior USG energy policy 
official would help the GoG act in a way that enhances 
overall European energy security.  End Summary. 
 
DepForMin on Gazprom and Energy 
------------------------------- 
¶2.  (C) On February 23rd, Ambassador met with Greek Deputy 
Foreign Minister Stylianides to get a read-out on the recent 
visit to Greece of Gazprom Chairman Alexei Miller. 
Stylianides initiated the request for the meeting, saying he 
was anxious to brief the Ambassador on key energy 
developments as they affect Greece.  He stressed that Greece 
is "now in the process of making decisions that will affect 
Greece's long-term energy independence and security." 
 
¶3.  (C) Stylianides said Miller was pushing Greece hard to 
remain primarily a Gazprom client.Musing on the strategic 
implications of the Russian offer, Stylianides indicated his 
concern about what would happen after Gazprom,s proposed 
contracts with Greece ran out in 2016: "if they stop 
supplying, we're in trouble."  According to Stylianides, 
Miller told the Greeks "Gazprom controls the whole system of 
energy.  Gazprom has already bought all Azeri gas for the 
next 25 years."  Furthermore, Russia was in a position, 
Miller claimed, to pressure the Azeris on price.  Stylianides 
chef de cabinet Platis chimed in that he understood that 
Russia had an agreement with the Azeris to purchase Azeri gas 
at low prices. 
 
¶4.  (C) As for Europe, Stylianides said Miller told him that 
"Russia is ready to give energy to Europe for the long term. 
We are already in a position to deliver 150 bcm now and, with 
upgrades, up to 300 bcm annually."  Stylianides characterized 
Miller,s overall message to the Greek Government as "either 
you play with us or you don't play at all."  This was 
reinforced in Stylianides' mind by his feeling that the 
Russians are trying to become the "monopolist of monopolies," 
getting into a controlling role for all varieties of energy 
supplies: "They're trying to control nuclear power as well to 
have absolute control over European gas energy."  He claimed 
Russia was also "in North Africa," and said he would be 
investigating this further during his upcoming March 13-14 
trip to Libya. 
 
The Situation in Turkey and in Italy 
------------------------------------ 
¶5.  (C) According to Stylianides, Miller indicated that 
Gazprom was looking into connecting BlueStream I and II with 
Turkey.  It would be from this source that Gazprom would 
provide gas not only to Southeastern Europe, but also 
Southwestern Europe through Greece.  Gazprom was also sending 
gas through its North Sea pipeline, leading Stylianides to 
hypothesize that Gazprom was "trying to bypass the Ukraine." 
He said he did not know if there had been discussions between 
Russia and Turkey on these issues, but knew that the Russians 
and the Italians had spoken. 
 
¶6.  (C) Ambassador noted that while Italy was obtaining 
Gazprom gas through Russia and Ukraine, it was also 
purchasing LNG from Algeria, and furthermore, was looking at 
expanding its LNG terminal capacity.  Although domestic 
opinion was against building new LNG terminals in Italy 
proper, we had heard Albania and Italy were considering a 
proposal from an investment group involving Qatar LNG and an 
LNG receiving station built on the coast of Albania, near 
Fier, with an underwater pipeline to Italy.  Ambassador noted 
that these discussions are serious, with the lead investor 
being a Swiss electricity utility.  The Turks also were 
expanding their supply options: the country had signed a 
contract with Egypt to supply gas through Syria.  This helps 
Turkish independence. 
¶7.  (C) More broadly, Ambassador acknowledged that Gazprom's 
apparent strategy was to monopolize the European market and 
close out the competition.  That would not be in either 
Greece's or Europe's interest.  Ambassador stressed it would 
be a bad idea to commit Greek or Turkish capacity to Russian 
gas, but that the USG message is not anti-Russian, merely 
pro-free-market:  diversified supply allowed the market to 
work.  Ambassador also noted that if Greece had an Azeri gas 
source, it would have much more leverage vis--vis Gazprom, 
from which Greece currently derives as much as 80 percent of 
its domestically consumed natural gas. 
 
¶8.  (C) The Ambassador refuted Alexei Miller's claim that all 
Azeri gas was controlled by Russia.  Ambassador recalled the 
Azeris have contracted with BOTAS for the supply of gas with 
the rights of resale to countries to Turkey's west. 
Ambassador also noted that there was a lot of Turkmen gas, 
but so far the only route out was through the Gazprom 
network, making it less than optimally Russian independent. 
Ambassador noted that Azeri resistance to a TransCaspian 
Pipeline might finally be weakening in acknowledgment of 
their own importance as providing a non-Russian pipeline to 
the West. 
 
DEPA in Baku 
------------ 
¶9.  (C) Regarding Greek/Azeri efforts to sign a sourcing 
contract for gas, Stylianides said DEPA,s (Greece's major 
natural gas company) Vice President and General Director were 
going to Baku this week at the Azeris' invitation. The Azeris 
had also invited the Italians, the Bulgarians and others for 
discussions.  Stylianides thought this was a positive 
development, although he reserved judgment until he had had a 
chance to be debriefed by the DEPA team. (Note: Embassy was 
also informed of the DEPA meetings in Baku directly by DEPA, 
and have been promised a debrief next week. End Note.)  He 
also said the Azeris were interested in "selling rights to 
the Turks and were asking how much Greece could take." 
 
The British are Coming... 
------------------------- 
¶10.  (C) On February 23 and 24 econoffs held meetings with 
their counterparts from the British Embassy, at the request 
of the British, to discuss the Greek energy situation, and 
the regional implications of the Miller visit.  British 
Charge Ian Whitting explained that his mission was in the 
process of alerting London to the full implications of the 
Gazprom efforts in Athens, and the follow-on consequences for 
Western European energy security.  According to Whitting, the 
Greek MFA had contacted them immediately after the Miller 
visit to provide a debrief and request information as to the 
veracity of Miller's claims vis-a-vis Russian control of 
Azeri gas. In particular, Whitting was asking that London 
pressure BP to provide hard data on the status of the Shah 
Deniz fields in order to confirm or refute Miller's claims. 
 
Moisis Sends Mixed Messages 
--------------------------- 
¶11.  (C) Whitting also shared a variety of information 
regarding his meetings with various energy figures, GoG 
officials, and industry executives.  Of particular note, he 
observed that currently in Greece, only the Greek MFA had any 
inkling of the energy security consequences of the Gazprom 
visit, and that in his opinion the Minister of Development 
Sioufas was a "old-fashioned Greek politician" limited in 
vision to the domestic implications of any policy decision. 
He also provided a read-out of his Ambassador's recent 
meeting with DEPA Chairman Moisis, in which Moisis expressed 
concern that much of DEPA's leadership -- excluding himself 
-- was fully in favor of Russian gas because of Greek-Azeri 
political differences stemming from Greek reluctance to 
condemn Armenia on Nagorno-Karabakh and an Azeri direct 
flight from Baku to Northern Cyprus last year. 
 
¶12.  (C) Interestingly, Senior Commercial Officer met for 
lunch with Moisis on February 23rd.  During that meeting 
Moisis spun a more complicated, and yet thoroughly Greek, 
story about Gazprom efforts to control natural gas in Greece. 
 In this story, Minister Sioufas is too overworked to focus 
on energy issues, and has ceded most decisions in this area 
to his SecGen Stefanou.  Stefanou, according to Moisis, has 
Parliamentary aspirations which keep him in close contact 
with Greek businessman Copolouzos (the CEO of Prometheus gas, 
a competitor to DEPA in northern Greece), who is closely 
linked to Gazprom.  In this way, says Moisis, Gazprom is 
influencing senior Greek officials and driving GoG policy 
inexorably into the hands of the Russians.  (Note: Moisis has 
indicated in a conversation with Ambassador that he is close 
to resigning his position in DEPA after losing out in an 
internal power struggle with the new Managing Director of 
Gazprom.  He is now painting himself as the loser in a 
grander struggle for the East-West alignment of Greek energy 
policy, with the pro-Russian forces in DEPA now ascendant. 
End note.) 
 
Comment 
------- 
¶13.  (C) Although the current level of Greek gas 
interconnectivity with Western Europe is limited, it is clear 
that the Russians view it, or its potential, as a threat to 
their dominance on energy supplies flowing West.  Gazprom's 
all-out assault on the GoG to lock it into long-term 
contracts with Russia, as well as Miller's disparagement of 
Azerbaijan's ability to provide gas, have the Greeks worried. 
 Additionally, GoG officials in the Ministry of Development 
may not currently have the vision necessary to understand the 
geo-political implications of the game Greece finds itself 
in.  In short, their view may be, "better a bird in the hand 
than two in the bush."  Not known generally for its long-view 
strategic thinking, the GoG could quite conceivably succumb 
to the Russian offer simply because of its immediacy, missing 
the long-term implications both for itself and energy 
diversification to Western Europe.  It is clear that our 
British colleagues share this same unfortunate assessment of 
the situation. 
 
¶14.  (C) In addition, Miller also linked Greek interest in 
seeing the Burgas-Alexandropoulos (B-A) pipeline completed to 
their willingness to sign a deal with Gazprom on the TGI 
interconnector.  According to the Brits, Miller told 
Molyviatis that Gazprom had purchased Sibneft, the majority 
equity holder in the proposed Russian, Bulgarian, Greek B-A 
project, and therefore was in a position to favorably promote 
the B-A against other proposed Bosphorus bypass pipelines 
(presumably the Turkish Samsun-Ceyhan proposal) through 
favorable financing arrangements. 
 
¶15.  (C) Post believes that we have a critical opening to 
positively influence GoG policy on energy security by 
providing timely and detailed information regarding Caspian 
energy, Azerbaijan/SOCAR capabilities, and a broader picture 
on the regional energy (and energy security) situation.  To 
take advantage of this opportunity, however, Post requests 
that Washington make available a subject-matter 
expert/analyst on Caspian energy to brief the GoG as soon as 
possible.  Post further requests that Washington provide a 
senior energy policy maker to accompany, or follow-on to, the 
analyst, to provide the necessary counterweight to the 
Russian blitz.  Miller's visit to Greece was followed by the 
Russian Foreign Minister Lavrov, and included an offer of 
further contact with Moscow; we must project the same (or 
greater) level of interest in seeing the GoG follow an 
energy-diversified path in order to be successful.  End 
Comment. 
Ries