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Cablegate: Ambassador Delivers Bosphorus Demarches to Energy

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 ANKARA 005051

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: EPET EWWT PREL ELTN EINV ENRG SENV TU UK
SUBJECT: AMBASSADOR DELIVERS BOSPHORUS DEMARCHES TO ENERGY
MINISTER

REF: A. MANN E-MAIL VIA JONES AUG 30
B. STATE 186707
C. STATE 178586
D. STATE 178695
E. ANKARA 4892

SENSITIVE BUT UNCLASSIFIED. PLEASE HANDLE ACCORDINGLY.
1. (SBU) SUMMARY: Ambassador delivered ref a-d demarches on
Bosphorus bypass issues on August 31 to Minister of Energy
Hilmi Guler. Ambassador stressed that the USG did not
support a specific route or project, but called for timely,
transparent decisions from the GOT on permits, specifically
for Thrace Development Company (TDC). Ambassador delivered
ref a-d messages on Odessa-Brody and Voluntary Principles on
Turkish straits oil tankers and bypass pipelines. Minister
Guler promised a timely answer on the TDC permit, but noted
that relevant Ministries were still studying all five
trans-Turkey applications for issues of environment, safety,
and through-put guarantees. End Summary.

Thrace Development Company
--------------------------

2. (SBU) Ambassador delivered ref a and d demarche on Thrace
Development Company( TDC) on August 31 to Energy Minister
Hilmi Guler, stressing that he would deliver the same message
to the Minister of Foreign Affairs. While stressing that the
USG strongly supported a Bosphorus oil bypass, maybe two, if
supported by the market, Ambassador noted that the USG did
not support a particular route or project. Nevertheless, he
noted the longstanding application and diligent response from
TDC for a trans-Thrace route. Ambassador called for at least
a timely up or down response. Citing press reports that the
GOT supported the Transneft backed trans-Thrace route,
Ambassador emphasized that projects should be determined by
market and environment realities, not by government lobbying
or prescription. Echoing replies from other government
officials (ref e), the Minister categorically denied the
press reports, stating that the GOT had not reached a
decision on route or project(s). He stated that in line with
GOT procedures, the five project permit applications were
still in the evaluation phase at the relevant ministries.
The Minister noted that there had been a recent meeting at
the MFA to study the advantages and disadvantages of the
proposed projects. In response to a question from the
Ambassador, he asserted that this was not a chicken and egg
dilemma. Although all the applicants claimed they had lined
up through-put guarantees,the Minister said that none could
demonstrate a binding commitment from oil companies, so the
GOT was unable to yet reach a decision. The Minister
promised a timely response, noting that a prolonged process
was bad for everyone.

Voluntary Principles for Bosphorus
----------------------------------

3. (SBU) Ambassador also delivered ref a and c demarche on
USG position on Turkish MFA proposed Voluntary Principles on
straits oil tankers and bypass pipelines. While expressing
support for the GOT's intentions, Ambassador emphasized need
for 1) truly voluntary and informal dialogue, 2)
identification of principles and informal codes, not formal
agreements, 3) participation by Russians, and 4) avoidance of
prescriptive approaches. The Minister accepted the
objections to the text without expressing any specific
differences of views. The Minister agreed with the
Ambassador that there was a need for a diversity of
pipelines. He said that in his opinion the market would
support two pipelines: this could be one trans-Thrace and one
Samsun-Ceyhan. The Minister thought another option could be
an expansion of capacity of the Baku-Tbilisi-Ceyhan pipeline.
Moreover, he thought that there could be a link from
Novorossiysk to Baku.

Odessa-Brody
------------

4. (SBU) Ambassador delivered ref b point on Odessa-Brody
and asked the Minister if this would likely be raised by the
GOT with President Putin. The Minister said that GOT would
likely NOT raise this issue, but noted that the decision to
reverse the pipeline was a big mistake for all parties. He
emphasized that Odessa-Brody was the counter-example of a
failed speculative project that drove the GOT's need for
through-put guarantees in evaluating bypass proposals.

Gas and East-West Corridor
--------------------------

5. (SBU) The Minister raised what he viewed as an enhanced
bypass opportunity for the Shah Deniz natural gas pipeline if
it could include Turkmenistan and Kazakhstan gas moving via
Turkey to Europe. In this way, Turkey could make a "smooth
slalom", bypassing both Russia and Iran. He noted the
particular challenges facing Turkey given take-or-pay
contracts and great reliance on Russia (growing with Blue
Stream). The Minister said the GOT was at a critical
decision point for Iranian gas, noting that the arbitration
case between the two countries continued. The Minister
claimed that Russia and Iran had some sort of deal on gas.
On European demand for Iranian gas, Minister Guler said
Europe was not in pressing need of the gas from Iran, but
would like to diversify its sources.
EDELMAN

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