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Cablegate: Rwe Seeking Political Support for Nabucco Project

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RUEHROV RUEHTM
DE RUEHDF #0038 2740808
ZNR UUUUU ZZH
R 300808Z SEP 08
FM AMCONSUL DUSSELDORF
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INFO RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
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RUEHAH/AMEMBASSY ASHGABAT 0001
RUCNFRG/FRG COLLECTIVE
RUCNMEM/EU MEMBER STATES
RUEHDF/AMCONSUL DUSSELDORF 0183

UNCLAS DUSSELDORF 000038

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ENRG EPET EU TU TX AJ GM
SUBJECT: RWE SEEKING POLITICAL SUPPORT FOR NABUCCO PROJECT

REF: USEU 1238

1. (SBU) In a September 26 meeting with CG, RWE Chief
Commercial Officer Stefan Judisch and Nabucco expert Jeremy
Ellis made a strong plea for USG support in encouraging the
German government to give up its "fence-sitting attitude" and to
take over the role of "moderator" in lining up political support
for the Nabucco pipeline project. Due to its heavy involvement
in the North Stream project, they asserted, Berlin would be a
"credible arbitrator" in helping overcome Russian opposition to
Nabucco. Thus far, however, Berlin had shown "no leadership" in
this respect, although Economics Minister Glos said he fully
supports it. Foreign Minister Steinmeier, as former Chancellor
Schroeder's closest aide, was clearly on the Russian side, they
said, while Chancellor Merkel has been "too diplomatic" to take
a stance, at least at the present time. The upcoming 2009
Bundestag election campaign, in which the energy supply issue
would play a role, would complicate things further, they stated.

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2. (SBU) Judisch spoke of a "compelling commercial rationale"
for the project, but stressed that it needs a "political
framework." If RWE and its partners were unable to mobilize the
necessary political support within the next 6 months, "the
project would be dead." The Russia-Georgia conflict had "forced
the issue" and made clear that "political leadership" was
absolutely necessary to get the project off the ground. Before
Georgia, RWE and its partners could have "muddled through," but
this was no longer possible, our interlocutors stated. The
conflict in Georgia had "increased the probability for the
project's failure," but it had at least "awakened the
politicians" and driven home the message.

3. (SBU) Negotiations with Turkey concerning its supply
concerns were going well; the next few weeks could bring
considerable movement, and an intergovernmental agreement
between the Nabucco countries, the EU and Turkey could be
achieved by the end of the year, they maintained. The region
easily has enough natural gas reserves to make Nabucco
profitable, but the pipeline faces supply challenges as there
must be a second supplier in addition to Azerbaijan to make the
project feasible. If there were no problem with Iran, the
project would go forward immediately. Supply from Iraq was a
matter of timing and risk, he stated.

4. (SBU) Referring to USEU Special Envoy for EU Affairs and
Eurasian Energy Gray as an "important ally," Judisch and Ellis
(who had just returned from a meeting with him the previous
day), expressed strong appreciation for USG interest and support
in this matter. In ongoing negotiations with Turkey, Special
Envoy Gray's influence had been very helpful. In particular,
any U.S. support in getting the German government to take over a
leadership role for the Nabucco project would be highly
appreciated, Judisch said, adding that he is often in Berlin and
would welcome the opportunity to meet with Ambassador Timken or
other Embassy representatives on this matter.

BOYSE

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