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DE RUEHAK #5334/01 2571518
ZNY CCCCC ZZH
R 141518Z SEP 06
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 8670
INFO RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES
RUEHGB/AMEMBASSY BAGHDAD 0745
RUEHIT/AMCONSUL ISTANBUL 1265
RUEUITH/ODC ANKARA TU
RUEHNO/USMISSION USNATO 5157
RHMFISS/CDR USEUCOM VAIHINGEN GE
RUEHBS/USEU BRUSSELS
RUEKJCS/SECDEF WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC

C O N F I D E N T I A L ANKARA 005334 
 
SIPDIS 
 
SIPDIS 
 
DEPT ALSO FOR EUR MATT BRYZA AND STEVE HELLMAN 
 
E.O. 12958: DECL: 09/07/2016 
TAGS: ENRG EPET PREL TU GR AZ IR
SUBJECT: TURKEY AND SOUTHERN GAS CORRIDOR - TAKING THE 
FIRST STEP 
 
REF: A. ANKARA 5332 
 
     ¶B. ANKARA 4935 
     ¶C. ANKARA 4728 
 
Classified By: ECONOMIC COUNSELOR THOMAS GOLDBERGER FOR REASONS 1.5 (B 
AND D) 
 
¶1.  (C) Summary: In a September 7 meeting, Energy Under 
Secretary Sami Demirbilek told us he understood the urgency 
 
SIPDIS 
of moving forward on a series of meetings between partners on 
the southern gas corridor.  However, Turkey has not arranged 
a bilateral meeting with Azerbaijan to determine transit 
terms, as was the next action identified in his August 
meeting with S/P energy adviser Steve Hellman (ref C). 
Demirbilek explained that agreeing on commercial terms in 
such a bilateral meeting would be to act on partial 
information when the plans and commercial interests of other 
parties, including end users and companies, were unknown. 
Therefore, such an agreement on transit could only come out, 
he thought, of a multi-party setting in which Turkey had 
access to what he thought was all the relevant information, 
including the price paid by end users to Azerbaijan. 
 
¶2.  (C) Demirbilek also allowed that he is increasingly 
comfortable with Turkey's gas supply outlook for the coming 
winter and that, per Prime Minister Erodogan's commitments to 
President Saakashvili at the BTC events in July, Turkey is 
willing to devote its SCP portion for this winter to Georgia, 
with the commercial details to be worked out bilaterally 
between Georgia and Azerbaijan.  The U/S also insisted that 
contrary to press reports, no deal had been reached with Iran 
during energy minister Hamaneh's August visit on Iranian gas 
transit to Europe.  He explained that Turkey's objective to 
slow down such a deal was a key reason behind Turkey's desire 
to be a trading, rather than passive, partner in gas transit. 
 End Summary. 
 
----------------------------------- 
No Action yet on Azerbaijan Meeting 
----------------------------------- 
 
¶3.  (C) Demirbilek told us the Minister would decide and take 
action on a Turkey-Azerbaijan meeting ("It is not in my 
hands.")  He emphasized that the Minister knew the need to 
take quick action.  Demirbilek argued that there should be a 
multilateral meeting for all parties to lay out their plans 
and commercial interests, before Turkey "spills out its 
numbers" for transit.  We pointed out that there remained 
bilateral issues that Turkey and Azerbaijan needed to address 
and that a bilateral process and multi-party process could be 
mutually supportive.  Demirbilek said that Turkey should have 
a commercial interest in gas traded through its territory -- 
such as through participation in a company that would market 
the gas.  The interest was as much in having access to 
commercial information as much as in having a share of the 
revenues. 
 
------------------------------ 
Georgia - We are Ready to Help 
------------------------------ 
 
¶4.  (C) Demirbilek said that the Prime Minister had stated 
clearly that Turkey would support giving its SCP gas to 
Georgia for this winter (but this winter only).  Demirbilek 
said that it was for Georgia and Azerbaijan to work out 
bilaterally the commercial aspects of this arrangement, but 
emphasized that there would be no penalties to Turkey.  He 
insisted that the SCP connecting spur to the Turkish grid at 
Erzurum would be complete by the end of October, per BOTAS's 
contractual obligation, and expected 700 MCM of natural gas 
to potentially flow in 2006 and 6 BCM in 2007.  Demirbilek 
said that overall Turkey was comfortable with its gas supply 
for this winter, and not expecting problems from 
Russia/Ukraine.  He pointed out that both Azerbaijan and 
Georgia were under pressure from Russia on gas, and that 
Turkey and others were waiting to see what happens. 
 
------------------- 
Obsession with Iran 
 
------------------- 
 
¶5.  (C) Demirbilek stated emphatically that there was no 
agreement with Iran on gas during the recent meetings in 
Ankara (in conflict with press statements in Teheran).  He 
said Iran had not agreed to Turkey's key points that Iran 
provide transit of Turkmen gas to Turkey and that Iran work 
with Nabucco as a consortium.   Demirbilek expected more 
meetings without agreement in Teheran and then back in 
Ankara, but nothing was scheduled.  He said there was no time 
pressure and that the Europeans were "not speaking loudly" on 
Iran.  While the source for Nabucco was still up in the air, 
Turkey is urging the Austrians to form a joint stock company 
to trade and market Nabucco gas.  This would both prevent 
bilateral deals and give Turkey access to information about 
Iranian prices that it could use in its own negotiations (and 
arbitration) with Iran. 
 
------------------------ 
What about Turkmenistan? 
------------------------ 
 
¶6.  (C) Demirbilek expressed support for a TCP from 
Turkmenistan, noting that gaining transit rights through Iran 
might push Niyazov.  We reminded him that TDA was working on 
a TCP pre-feasibility for Kazakhstan and Turkmenistan (as 
well as the visit program to Henry Hub to show off a good 
energy hub).  Demirbilek was supportive of both TDA projects, 
and said that Turkey could provide representatives from BOTAS 
and TPAO to a TCP working group to help with the 
pre-feasibility study.  The U/S also expressed interest in 
developing gas from northern Iraq with egress to and 
potential processing at Ceyhan. 
 
Visit Ankara's Classified Web Site at 
http://www.state.sgov.gov/p/eur/ankara/ 
 
WILSON