VZCZCXRO2262
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHAK #1846/01 2971053
ZNR UUUUU ZZH
R 231053Z OCT 08
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 7767
INFO RUCNCIS/CIS COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHIT/AMCONSUL ISTANBUL 4868
RUEUITH/ODC ANKARA TU
RUEAIIA/CIA WASHDC
RHEHAAA/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS SECTION 01 OF 02 ANKARA 001846 
 
SIPDIS 
 
DOE FOR LANA EKIMOFF, TYLER TILLER 
USTDA FOR DAN STEIN 
OPIC FOR DULCE ZAHNISER 
 
E.O. 12958: N/A 
TAGS: ENRG EPET TU
SUBJECT: SCENESETTER FOR DOE DEP SEC KUPFER'S OCT 30-31 
VISIT TO ISTANBUL 
 
¶1.  (SBU) Turkey remains the vital link in our strategy to 
bring gas from the Caspian Basin and Central Asia to Europe 
through a Southern Corridor.  Turkish leaders with whom you 
will meet believe Turkey is facing acute electricity 
shortages as early as 2009 and natural gas shortages of up to 
16 bcm by 2015.  They do not believe that there is sufficient 
gas available in the short- to medium-term to meet Turkey's 
needs and also fill both the Turkey-Greece-Italy 
Interconnector and Nabucco.  The global economic crisis may 
slow Turkey's energy demand, but some drivers of demand -- 
like expansion of the gas pipeline network for residential 
heating nationwide -- will continue unabated.  This energy 
supply insecurity is driving the GOT,s "Turkey First" 
position on energy transit, that natural gas will flow 
westward only when Turkey's future energy needs are met. 
Your goal is to convince the GOT that cooperation with other 
consumers (and producers) is the way toward energy security, 
that the U.S. is serious about helping Turkey meet its energy 
demand and that realistic ways are available to reduce future 
reliance on gas. 
 
¶2.  (SBU) The GOT understands and appreciates your mission to 
offer U.S. government assistance, financing and other 
guarantees to attract U.S. private sector investment into 
Turkey's energy sector.  However, they are skeptical that we 
can or will actually deliver.  Timing is an issue.  The GOT 
told us it needs to make real, concrete decisions affecting 
energy security within the next six months, and so far there 
is nothing on the table to compensate for the sacrifices 
Turkey is being asked to make.  It will therefore be key to 
put specific, concrete, substantive proposals on financing or 
guarantees on the table to make clear to the GOT that our 
effort is serious and substantive. 
 
¶3.  (SBU) We expect that the delegation will meet with PM 
Erdogan, Foreign Minister Babacan, Energy Minister Guler and 
Treasury Minister Simsek along with U.S. and Turkish business 
leaders working in the energy sector.  Below are some key 
questions and messages for your meetings.  As you relay these 
messages, a little background on each interlocutor might be 
helpful. 
 
--PM Erdogan will make the ultimate decisions about 
Azerbaijan gas off-take and the future of Turkey as a transit 
country for Europe.  He understands the strategic reasons for 
Turkey becoming a reliable gas transit partner for Europe but 
also believes he must secure gas for Turkey.  This country,s 
transit location is leverage to accomplish that. 
 
--Foreign Minister Babacan is the Turkish EU accession 
coordinator and may be the most supportive of the strategic 
vision for developing the Southern Corridor. 
 
--Minister Guler leads the "Turkey first" faction within the 
GOT and appears to has the PM,s ear on this issue.  He will 
be the most skeptical of our offers to help. 
 
--Minister Simsek is in charge of relations with the IFIs and 
will be knowledgeable about EXIM and OPIC operations.  He can 
help make the case to the PM for how project financing works 
and may have ideas of how to leverage U.S. proposals with 
what the EU or IFIs are planning. 
 
Key messages for the delegation to deliver: 
------------------------------------------- 
¶4.  (SBU) In addition to offering possible U.S government 
assistance, you should reinforce our key energy policy 
messages. 
 
-- Achievement of a viable Southern Corridor will be a 
strategic achievement for Turkey, the U.S. and our partners 
that will surpass the importance of the Baku-Tbilisi-Ceyhan 
oil pipeline. 
 
-- The Azeris have a strategic goal in providing gas to 
Europe, not a commercial one.  Without strategic connection 
to Europe of the Southern Corridor, Azerbaijan appears 
unlikely to develop Shah Deniz Phase II gas at this time. 
 
-- A viable Southern Corridor can unlock not only Azeri gas, 
 
ANKARA 00001846  002 OF 002 
 
 
but also Turkmen and Iraqi gas, and make larger quantities of 
gas available to Turkey in the long run. 
 
Key questions to ask the GOT: 
---------------------------- 
 
¶5.  (SBU) We recognize that Turkey faces an energy crunch. 
The U.S. wants to help Turkey develop energy supplies within 
a strategic framework that includes a Southern Corridor.  To 
meet Turkey,s needs and move the Corridor forward, we need 
to understand the following: 
 
-- What is the GOT's overall energy strategy and your 
projected future energy mix? 
 
-- What are GOT priorities for U.S. government assistance, 
i.e., energy efficiency and conservation, new generation, 
upgrading of existing generation, renewables, etc.? 
 
-- Are there international or bilateral funding mechanisms 
already in place?  To what extent can U.S. government 
assistance leverage EU or IFI financing? 
 
Visit Ankara's Classified Web Site at 
http://www.intelink.sgov.gov/wiki/Portal:Turk ey 
 
WILSON