VZCZCXRO1366
RR RUEHAG RUEHDBU RUEHDF RUEHIK RUEHLN RUEHLZ RUEHVK RUEHYG
DE RUEHAK #5611 2691151
ZNR UUUUU ZZH
R 261151Z SEP 06 ZDS
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 8980
INFO RUCPDOC/USDOC WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEHGB/AMEMBASSY BAGHDAD 0759
RUCNCIS/CIS COLLECTIVE
RUEHIT/AMCONSUL ISTANBUL 1342
RUEHDA/AMCONSUL ADANA 1140
RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS ANKARA 005611 
 
SIPDIS 
 
C O R R E C T E D  C O P Y -- REV ADDRESSEE AND PASS 
 
USDOE FOR CHARLES WASHINGTON 
USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG EPET EINV TU RU IR
SUBJECT:  TURKEY: PUSHING EU ON SOUTHERN GAS CORRIDOR 
 
REF: A: ANKARA 5332 
 
B: ANKARA 5000 
C: ANKARA 4379 
 
Sensitive But Unclassified.  Please handle accordingly. 
 
¶1.  (SBU)  Summary:  An Embassy-organized luncheon on September 22 
brought together local EU diplomats and Turkish Foreign Ministry 
officials to highlight Turkey's key role in European and global 
energy security.  MFA Energy DDG Mithat Rende called for greater 
engagement and visible support from the EU and its members to 
support the development of Azerbaijan and other Caspian natural gas 
sources to catalyze a "Southern Gas Corridor" to Europe as a way to 
gain alternatives to Russian supply and withstand "divide and 
conquer" pressure from Gazprom to lock up routes and buyers.  End 
Summary. 
 
¶2.  (SBU)  Rende expanded on Turkey's commitment to establishing gas 
transit to Europe.  He cited the importance of the new 
Baku-Tbilisi-Erzurum gas pipeline (which he said will be complete in 
November), Azerbaijan's Shah Deniz phase II, a potential 
trns-Caspian pipeline from Kazakhstan and/or Turkmenistan, 
development of northern Iraq hydrocarbon resources, and gas from 
Egypt via Syria and Jordan.  Rende said time was running out before 
Gazprom succeeded in locking-in long-term supply contracts with 
European end-users that would effectively lock-out these new transit 
opportunities.  He lamented Gazprom's divide-and-conquer strategy, 
citing the recent gas storage deal with Hungary.  Rende argued, 
however, that Turkmen President Niyazov, in signing a three-year - 
rather than a long-term supply contract with Russia, had clearly 
intended to create an opening for supplying other customers, 
including via a trans-Caspian pipeline. 
 
¶3.  (SBU)  Rende said Gazprom was pressing on Turkey for a Blue 
Stream expansion to fill Turkey's pipelines to Europe and to supply 
new customers such as Israel.  He noted that Iran needed to solve 
its problems with the west and establish itself as a reliable 
supplier before it could be a viable source, but he said Iran 
targetS 35 BCM to Europe via Turkey.  In response to questions about 
how Turkey would behave as a transit company, Rende argued that 
Turkey wanted a "fair share" of any transit arrangement crossing its 
territory, but that it had no intention of becoming a "new Gazprom." 
 He pointed to Turkish participation in a joint gas marketing 
company as one way of ensuring Turkey's fair share. 
 
¶4.  (SBU)  The local European embassy and Commission officers 
pointed out that the recent "Green Paper" identified energy supply 
and route diversification as a key objective for the EU, but 
admitted that Europe lacked a common energy policy.  The Polish and 
Finnish representatives saw their countries as beneficiaries of a 
southern corridor to the extent that it injected more market-based 
competition into Europe's dealings with Russia.  They expressed a 
strong opinion that the Commission should be more vocal in support 
of a southern route. 
 
¶5.  (SBU)  The Commission representative raised questions about 
Turkey's domestic demand and contractual position with respect 
natural gas, the amount of gas available in Azerbaijan, and the 
status of a trans-Caspian pipeline (TCP).  Rende noted that Turkey 
aimed to diversify its energy mix from the current 45% reliance on 
expensive imported natural gas for electricity generation by 
developing nuclear, coal, hydroelectricity, and renewable energy and 
that the gas available for transit well exceeded Turkey's projected 
domestic needs.  He pointed out that Russia had shown flexibility on 
take-or-pay contracts so Turkey had been able to bring its natural 
gas contracts situation into equilibrium. 
 
¶6.  (SBU)  Comment:  Embassy Economic Officers echoed Rende's call 
for more visible support from the EU as customer for Caspian gas, 
noting that senior USG officials had visited southern corridor and 
European capitals and the U.S. was funding a pre-feasibility study 
for a TCP from Kazakhstan.  The European diplomats seemed to get the 
points.  Similar representations in capitals would reinforce their 
reporting. 
Wilson