VZCZCXRO5658
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHSI #0849/01 1241427
ZNY CCCCC ZZH
O 041427Z MAY 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1505
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHAH/AMEMBASSY ASHGABAT PRIORITY 0863
RUEHTA/AMEMBASSY ASTANA PRIORITY 0032
RUEKJCS/OSD WASHINGTON DC PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 000849 
 
SIPDIS 
 
E.O. 12958: DECL: 05/01/2019 
TAGS: ENRG ECON PGOV PREL RU AZ GG
SUBJECT: GEORGIAN PM SAYS TURKMEN INTERESTED IN WESTERN 
INVESTMENT, LNG 
 
REF: TBILISI 788 
 
Classified By: Ambassador John F. Tefft for reasons 1.4 (b) and (d). 
 
1.(C) SUMMARY:  Prime Minister Nika Gilauri regaled the 
Ambassador April 30 with a readout of his April 22 trip to 
Turkmenistan.  Gilauri said that while he found Ashgabat 
quite surreal, the trip was successful and he sees the 
potential for cooperation with Turkmenistan to develop 
offshore natural gas deposits.  He said that Turkmen 
President Berdimukhamedov was quite welcoming and appeared 
annoyed with the Russians.  The Turkmen leader asked Gilauri 
to tell the U.S. that offshore Turkmen gas deposits were up 
for grabs and that he was interested in attracting western 
investment.  Berdimukhamedov stressed that pipelines are 
susceptible to geopolitical pressures and that he would far 
prefer to see liquefied natural gas (LNG) structures 
developed that would allow Turkmen gas to be fed into the 
existing South Caucasus Pipeline (SCP).  We would appreicate 
the Department's reaction to Gilauri's presentation.  END 
SUMMARY. 
A WARM WELCOME TO OZ . . . . 
¶2.  (C) Gilauri started the meeting by describing Ashgabat as 
a &cartoon8 city.  He said that visiting Turkmenistan was 
unlike anything he had ever experienced before, and went on 
to highlight the surreal nature of the first Turkmenistan 
Energy Summit.  The PM found the orchestrated clapping for 
Turkmen President Berdimukhamedov "awe-inspiring" and 
entertaining.  He said that the Turkmen president was very 
welcoming and video footage of the two meeting and shaking 
hands was played repeatedly on Turkmen television.  In a 
definite poke at the Russians, Gilauri said Berdimukhamedov 
made a point of asking Gilauri, in front of the cameras, to 
please say hello to his best friend Misha Saakashvili. 
TIMING RIGHT FOR GAS DISCUSSIONS 
¶3.  (C) Gilauri said the timing of his trip to Ashgabat was 
good, as Berdimukhamedov was clearly frustrated at the 
country's inability to export gas for the last ten days due 
to pipeline problems devised by the Russians.  Gilauri said 
that he approached the Turkmen president in a straight 
forward manner, and immediately got to the reason for his 
visit - how Georgia could help Turkmenistan get gas to the 
West.  Gilauri said that Berdimukhamedov seemed to appreciate 
his directness and responded in a similar manner. 
PIPELINES ARE TOO RISKY, LET'S DO LNG 
¶4.  (C) The Turkmen president said in the past he would have 
advocated building consensus between countries in the region 
including Iran.  He said however that now he realizes this 
would be futile, and that any pipeline would be at risk, 
because once it was built, Iran, Russia and Azerbaijan all 
might attempt to block the line to influence delineation 
discussions.  Berdimukhamedov said he sees LNG as the 
solution to geopolitical wrangling.  He told Gilauri that 
Georgia or the West could have as much off-shore gas as they 
wanted, but it should be taken in the form of liquefied 
natural gas (LNG) and not through a pipeline.  He stressed, 
however, that onshore deposits belonged to the Turkmen people 
and were not available.  The discussion then turned to 
visions of developing an LNG system.  The two agreed that LNG 
terminals would need to be built on both the Turkmen and 
Azerbaijani sides of the Caspian probably at a 30 BCM 
capacity.  In Azerbaijan LNG would be re-gasified and 
transported out through the existing South Caucasus Pipeline 
Qtransported out through the existing South Caucasus Pipeline 
(SCP).  While both Berdimukhamedov and Gilauri acknowledged 
that developing the LNG structure would be more expensive 
than a pipeline, they stressed it would be less susceptible 
to political whims. 
TELL THE U.S. OFFSHORE RIGHTS ARE UP FOR GRABS 
¶5.  (C) Berdimukhamedov asked Gilauri to communicate to the 
U.S. that Turkmenistan wants foreign investment and that they 
are ready to give offshore rights to interested American 
companies.  He asked Gilauri to tell the U.S. to encourage 
American companies to look at Turkmenistan. 
NEW ARCHITECTURE FOR CASPIAN GAS, RUSSIANS MAYBE NOT NECESSARY 
¶6.  (C) Berdimukhamedov told Gilauri that Turkmenistan had 
decided to hold its first ever Energy Summit with the 
intention of developing a new strategic system of 
transporting natural gas from the region.  Given 
Berdimukhamedov,s state of mind, Gilauri clearly thought 
this meant developing a new transportation system that would 
neutralize Russian influence.  The PM added that when the 
general director of GazProm visited Turkmenistan several 
months ago, the Turkmen president refused to meet him.  The 
PM said he thinks Turkmen discussions with the Chinese are 
making them more confident in their dealings with the 
Russians.   Gilauri said three factors motivated the Russians 
to blow up Turkmen natural gas pipelines: first, the energy 
conference, second, the falling demand for natural gas now in 
 
TBILISI 00000849  002 OF 002 
 
 
Europe and a Russian lak of capital to make promised gas 
purchases from Turkmenistan, and third, the Chinese pipeline. 
NOW ON TO BAKU 
¶7.  (C) Gilauri said that he plans to go to Azerbaijan in the 
near future to discuss the possibility of forming a joint 
Georgian-Azerbaijani company to look at developing and 
exporting Turkmen gas (reftel).  He said he discussed this 
idea with the Turkmen, who despite tensions over delineation 
issues, said they would support such a company.  Gilauri said 
Azerbaijani support for this idea was of course critical and 
he hoped his trip could convince them of the need to explore 
new ways to develop Turkmen gas. 
COMMENT: USE TURKMEN CONCERNS TO DIVERSIFY CASPIAN GAS 
¶8.  (C) Following the recent signing of an MOU between the 
Azerbaijani state gas company SOCAR and Russia's GazProm, it 
appears the Georgians have decided to take a more active role 
in helping to diversify Caspian gas.  This is clearly in 
their interest both geopolitically and financially.  If 
Caspian gas transits Georgia to the west, the country stands 
to benefit financially from transit fees.  The development of 
Turkmen gas would also help increase Georgian energy security 
by further diversifying gas supply beyond Russian and 
Azerbaijan.  The Georgians appear nonplused by Turkmen 
efforts to use them to irritate the Russians, as 
Berdimukhamedov did when he greeted Gilauri with a public 
display of support for Georgian President Saakashvili.  We 
would appreciate the Department's reaction to Gilauri's 
presentation, so that we can help steer the Georgian PM in 
the right direction. 
TEFFT