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DE RUEHAK #2921/01 3411514
ZNR UUUUU ZZH
R 071514Z DEC 07
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 4590
INFO RUCPDOC/USDOC WASHDC
RHEBAAA/DEPARTMENT OF ENERGY WASHDC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHUNV/USMISSION UNVIE VIENNA 0172
RUEHAH/AMEMBASSY ASHGABAT 1950
RUEHKB/AMEMBASSY BAKU 1547

UNCLAS SECTION 01 OF 02 ANKARA 002921 
 
SIPDIS 
 
USDOE FOR CHARLES WASHINGTON 
USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG EINV BEXP TU
SUBJECT: PRESIDENT GUL PROPOSES GAS PIPELINE VIA IRAN AND JOINT 
EXPLORATION FOR TURKMEN GAS 
 
SENSITIVE BUT UNCLASSIFIED.  PLEASE HANDLE ACCORDINGLY. 
 
¶1.  (SBU) SUMMARY: Turkish President Abdullah Gul's December 5-6 
visit to Turkmenistan focused on energy and economic relations.  Gul 
proposed to his Turkmen counterpart to transport Turkmen gas to 
market via Turkey, and joint oil and gas exploration in 
Turkmenistan.  Energy Minister Guler was quoted in press reports as 
saying that Turkey proposed a new gas pipeline through Iran.  An 
advisor to Guler confirmed that Guler had proposed the "more 
realistic and doable" Iran route over the Trans-Caspian pipeline 
(TCP) while another Energy ministry contact said Turkey supports 
both TCP and an Iran pipeline, and said the Turkmen wanted to go 
forward with joint exploration.  Both contacts emphasized Turkey's 
need for more gas in the short (5-7 year) term, when Turkey's supply 
insecurities will be highest.  End Summary. 
 
¶2.  (U) Following his trips to Azerbaijan, Georgia and Pakistan, 
Turkish President Abdullah Gul paid an official visit to 
Turkmenistan on December 5-6.  Gul's stated aim was to "rebuild 
ties" with the Turkmen Government and increase economic cooperation 
between the two countries.  "My visit will provide an opportunity to 
redefine, revise and strengthen our shared vision for the future, in 
the light of past experiences," said Gul, prior to his departure. 
This was Turkey's first Presidential visit to Turkmenistan in seven 
years.  Energy Minister Hilmi Guler, Industry Minister Zafer 
Caglayan, Turkish Union of Chambers and Commodity Exchanges (TOBB) 
President Rifat Hisarciklioglu and several businessmen joined Gul 
for his visit. 
 
¶3. (U) Gul and Turkmen President Berdymukhamedov signed a joint 
declaration and held a press conference, where Gul said both sides 
agreed on the immense potential for cooperation in regional and 
international issues. President Berybukhamedov referred to both 
countries facing terrorism and crime problems on which the two 
countries agreed to work together, but gave no details.   Following 
the presidential meetings, Turkish Industry Minister Caglayan and 
Vice Chairman of the Turkmen Council of Ministers Mukhamedov signed 
an "Agreement for Establishment of an Inter-Governmental Economic 
Commission between Turkey and Turkmenistan." 
 
A Pipeline via Iran 
------------------- 
 
¶4. (U) After meetings with his Turkmen counterparts, Energy Minister 
Guler announced that Turkey wanted to revitalize the 
Turkey-Turkmenistan gas pipeline project.  Guler said President Gul 
and President Berdymukhamedov would discuss building a 16BCM 
capacity pipeline from Turkmenistan to Turkey via Iran. 
 
¶5. (SBU) Following Minister Guler's comments on the Iran pipeline 
proposal, Musa Gunaydin, an advisor to Energy Minister Guler, told 
us that Guler had not actually specified a route through Iran in his 
press comments, but did not deny that he raised the Iran route with 
the Turkmen.  Gunaydin said that Turkey supports both a 
Trans-Caspian Pipeline (TCP) and a Turkmenistan- Iran- Turkey 
pipeline.  There is enough gas supply in Turkmenistan and enough gas 
demand in Europe for both projects.  However, Gunaydin reiterated 
the importance of timing, arguing that Turkey was competing against 
Russia and had to act quickly to secure other resources.  He thought 
the Gul visit was a major step and that progress would come quite 
quickly after this stage.  "An agreement may be concluded in a few 
months," said Gunaydin. 
 
¶6. (SBU) We received a different reaction from Energy Analyst and 
independent advisor to Minister Guler, Faruk Demir, who confirmed 
that Guler had proposed the Iran route, although he said this did 
not mean Turkey was giving up on TCP.  Turkey had supported TCP for 
years without seeing any progress, and would be happy to move 
forward with it if they saw it as "more realistic and doable." Demir 
noted that a major impediment to the Iran route had been the lack of 
an agreement between Turkey and Iran on transit issues.  "The recent 
agreement Turkey and Iran reached, where Iran agreed to Turkey using 
Iranian territories for importing Turkmen gas, paved the way for 
this project with Turkmenistan," said Demir.  Turkey plans to build 
a new pipeline to transport the 16BCM of gas that Turkey contracted 
with Turkmenistan for in 1999, plus any Turkmen gas that Turkish 
companies may develop in the future.  The existing gas pipelines 
between Turkmenistan, Iran, and Turkey could support a 5BCM initial 
flow, according to Demir, but construction of a high-capacity 
pipeline makes more sense. 
 
Joint Oil and Gas Exploration Projects 
 
ANKARA 00002921  002 OF 002 
 
 
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¶7. (SBU) Prior to Gul's trip, press reports citing an unnamed Prime 
Ministry official reported that Turkey would propose joint oil and 
gas exploration projects to the Turkmen side. Musa Gunaydin, an 
advisor to Energy Minister Guler, had told us about the GOT's plans 
to develop oil and gas fields in Turkmenistan in a meeting on 
December 3.  Gunaydin expressed high hopes on the Turkmen 
Government's position with regard to cooperation with Turkey, and 
said the timing was extremely important.  Gunaydin asked for the 
Embassy's assistance in facilitating access to the U.S. companies 
who may be interested in taking part in such projects.  Following 
Gul's visit, Gunaydin confirmed the Turkish side made the proposal 
for joint exploration and development and said the Turkmen wanted to 
go forward these projects. 
 
¶8. (SBU) COMMENT:  The proposals for joint exploration and 
transportation of Turkmen gas through Iran are consistent with 
Turkey's strategy to diversify and expand its energy supply over the 
next 5-7 years.  Turkey now gets 60% of its natural gas from Russia, 
and wants to be dependent on no single country for more than 30% of 
its gas.  It uses just over 50% of its gas for producing 
electricity, and needs to quickly and sharply increase electricity 
production to keep up with escalating demand.  The GOT is working 
hard to build good relations with all of its gas-rich neighbors, 
including Iran to meet these requirements. We have heard similar 
complaints about the lack of action on the TCP from Guler and other 
GOT energy contacts.  End Comment. 
 
Wilson