VZCZCXRO6347
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDBU RUEHDF RUEHIK RUEHLH RUEHLN
RUEHLZ RUEHPW RUEHROV RUEHVK RUEHYG
DE RUEHAH #0967/01 2561030
ZNR UUUUU ZZH
P 131030Z SEP 07
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 9358
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 2750
RUEHBJ/AMEMBASSY BEIJING 0574
RUEHKO/AMEMBASSY TOKYO 0450
RUEHIT/AMCONSUL ISTANBUL 1033
RHEFDIA/DIA WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 ASHGABAT 000967 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
PLEASE PASS TO USTDA DAN STEIN 
 
E.O. 12598: N/A 
TAGS: PGOV EPET EINV ETRD MARR AF TX
SUBJECT:  TURKMENBASHY REFINERY WILL SOON PRODUCE MORE JET FUEL 
 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (U) Charge called on Turkmenbashy Refinery General Director 
Tagangeldi Mamedov September 11.  Mamedov confirmed the refinery 
currently produces 6M tons of refined petroleum products a year, 
although the current capacity is 7.5M tons.  When the second phase 
of upgrading is finished in 2010, total capacity will be 10M tons. 
The contractor for the second-phase upgrade, which is focused on new 
equipment to refine an additional 2.5M tons/year of crude oil is 
Emerol Ltd. of Ireland, which also oversees environmental issues at 
the refinery. 
 
U.S. COMPANY INSTALLING CAPACITY FOR JET FUEL 
 
¶3.  (U) Additionally, work is well advanced on a separate project at 
the refinery to install structural and mechanical capacity to 
produce high-quality jet fuel.  The goal is to begin production by 
Turkmenistan's Independence Day, October 27.  Mamedov described the 
project as a left-over from the Soviet period that Russia then tried 
to resuscitate but eventually dropped. 
 
¶4.  (U) At the direction of former President Niyazov, Mamdeov went 
to Houston, Texas, last year, he said, and signed a contract with 
Merichem Chemicals and Refinery Services LLC to supply and install 
the equipment that was shipped to Turkmenistan in modular form to be 
assembled at the Turkmenbashy Refinery.  According to Mamedov, 
Merichem currently has a "chef de montage" on site, and will provide 
on-going quality-control services once production begins. 
 
¶5.  (SBU) In reply to a question, Mamedov said the Refinery is not 
opposed to new exclusive supplier contracts (for example, for jet 
fuel to the U.S. military in Afghanistan), but generally prefers to 
sell its production at auction on the Ashgabat "commodity exchange," 
because bidders tend to bid up the price over exclusive contracts 
since the Turkmenbashy Refinery is known in the Former Soviet Union 
and in Europe for producing world-standard finished products.  In 
this context, Mamedov noted sales to Afghanistan have increased 
significantly in the past year, although he didn't have statistics 
immediately at hand. 
 
"NO ECOLOGICAL PROBLEMS" 
 
¶6.  (U) Mamedov acknowledged ecological concerns are a major issue 
for the Turkmenbashy Refinery, especially since the 
Berdimuhamedov-mandated "International Tourist Zone" will be built 
near-by (septel).  He said the refinery's current contract with 
Emerol includes a significant ecological upgrade and monitoring 
component, and maintained the refinery has no problem with 
disposition of residual by-products because all are either sold 
(including to RusAl in Russia and Talco in Tajikistan for aluminum 
production) or re-refined into other commercial products such as 
road-building asphalt or "polypropylene tape that is sold all over 
Turkmenistan." 
 
"NO SECURITY PROBLEMS" 
 
¶7.  (SBU) Likewise, Mamedov said he is satisfied with security at 
the refinery.  Merhav (Israel) installed the security system that 
includes surveillance cameras and a closed-circuit TV monitoring 
system.  Merhav trained the extensive security force who are "young 
guys specifically chosen and educated to be loyal." 
 
SAYDI-II REFINERY STILL IN DRAFT STAGE 
 
¶8.  (SBU) Mamedov is also General Director of the Saydi Refinery on 
the Uzbek border, on the opposite side of the country.  Saydi's 
current production is 2-4M tons/year, although capacity is 6M tons. 
He acknowledged that President Berdimuhamedov and Vice Premier for 
Oil and Gas Tachberdi Tagiyev had recently ordered Saydi be 
upgraded.  The general plan is to build a new refinery next to the 
old one that would have a 3M-ton capacity.  However, this is "only 
in the planning stages."  The new Saydi project would refine 
 
ASHGABAT 00000967  002 OF 002 
 
 
products from existing natural gas wells, rather than crude oil. 
Mamedov re-emphasized that Saydi-II is only in "draft stage." 
 
¶9.  (U) The administrative buildings of the Turkmenbashy Refinery 
are of obvious Soviet vintage.  However, a Turkish construction 
company is completing a new 10-story administrative building on the 
premises.  The superstructure is finished, and interior work is 
under way. 
 
¶10.  (SBU) Mamedov was pleasant and business-like, although he was 
unsure of the precise time of his appointment with the Charge, who 
had to wander through the refinery's administrative headquarters on 
his own trying to find Mamedov's office.  He said he had received 
only a "letter of permission" from the Cabinet of Ministers in 
Ashgabat alerting him that "he was allowed to meet with the American 
Ambassador during the September 11-13 time-frame." 
HOAGLAND