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Cablegate: Iran Plans to Transit 35 Bcm of Turkmen Gas to Turkey

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RUEHLZ RUEHNEH RUEHPW RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHAH #1177/01 2581300
ZNR UUUUU ZZH
P 151300Z SEP 09
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 3472
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
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RUEHAK/AMEMBASSY ANKARA 5675
RUEHBJ/AMEMBASSY BEIJING 3393
RUEHKO/AMEMBASSY TOKYO 3257
RUEHIT/AMCONSUL ISTANBUL 3918
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UNCLAS SECTION 01 OF 02 ASHGABAT 001177

SENSITIVE

SIPDIS

STATE FOR SCA/CEN; EEB; NEA/IR
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR EHOUSE

E.O. 12958: N/A
TAGS: EPET PGOV EINV IR TU TX
SUBJECT: IRAN PLANS TO TRANSIT 35 BCM OF TURKMEN GAS TO TURKEY

REF: ASHGABAT 886

1. (U) Sensitive but unclassified. Not for public Internet.

2. (SBU) SUMMARY: Iranian media reported on September 12 that
Ankara and Tehran agreed to transport Turkmen gas to Turkey. The
media reports quoted an official of the National Iranian Oil Company
as saying that the volume of Turkmen gas transiting Iran would reach
35 bcm per year. To date, none of the reports has mentioned when
such transit operations would begin. Neither the Turkmen Government
nor local media have commented on the proposed, increased volumes so
far. END SUMMARY.

3. (SBU) In July, Turkmenistan and Iran signed an agreement to
increase the supplies of Turkmen gas to Iran from eight billion
cubic meters (bcm) of gas per year to 14 bcm and stated that volumes
could reach 20 bcm per year in the future. At the same time, the
Turkmen Government has never mentioned the possibility of increasing
gas shipments to Iran to 35 bcm per year. Turkmenistan can
technically increase supplies to Iran up to 14 bcm per year in the
short-term without jeopardizing its existing export obligations.
However, supplying 35 bcm could only be realized when the South
Yoloten gas field comes on line some time in the more distant
future.

4. (SBU) Currently, the Korpeje - Kurdkui gas pipeline connects
Turkmen western gas deposits to the Iranian gas transportation
network. With a diameter of 40 inches, the pipeline is capable of
transporting about 12.5 - 13 bcm of gas annually. This pipeline's
full capacity has never been used to its full extent. The maximum
shipments have never exceeded 8 bcm. Another transit option is the
Dowletabat - Sarakhs - Khangiran pipeline, planned for completion
and operation by the end of 2009. Its capacity will also only allow
for the transit of 12.5-13 bcm of gas per year (reftel). As a
result, if both the Korpeje-Kurdkui and Dowletabat-Sarakhs-Khangirin
were running at full capacity, they would only provide for the
transit of 25-26 bcm, falling 9-10 bcm short of the amount reported
in Iran.

5. (SBU) In addition to insufficient pipeline capacity, another
challenge is actually getting the 35 bcm of Turkmen gas from the
Turkmenistan-Iran border to Iran's border with Turkey. The existing
capacity of pipelines connecting Iran's northeastern and western
regions is not capable of carrying more than 10 bcm of gas per year.
Iran could employ a gas swap --consuming 10 bcm of Turkmen gas in
its northeastern provinces and providing the same volume of Iranian
gas at the Turkish border, but there would still be a need for
additional capacity to transport the remaining 15 bcm. Iran has
long-term plans to increase the capacity of its northeast-west gas
transportation system, but post has no information regarding how
many more bcm of gas the upgrade could handle.

6. (SBU) Getting Turkmen gas across the Iran-Turkey border would
also be a problem, as the capacity of the existing Tabriz-Erzurum
pipeline is not enough to handle 35 bcm of gas per year. As a
result, the two countries may need to construct another gas pipeline
in order to transport 35 bcm of gas per year. Last but not least,
in 2008 Turkey consumed 36 bcm of gas, and is unlikely to require an
additional 35 bcm of gas given current demands. Moreover, exporting
excess gas volumes further west would require additional pipeline
capacity, which means more investment and more time.

7. (SBU) COMMENT: Turkmenistan is currently looking for new gas
customers in addition to Russia, but has not backed off its mantra
of requiring all customers to buy their gas at the Turkmen border.
As a result, any new Turkmen gas customers, including Iran, would
need to invest in pipeline transportation systems that are not only
costly, but would take years to complete. As a result, the recent
announcement by Iran to transport large volumes of Turkmen gas to

ASHGABAT 00001177 002 OF 002


Turkey seems only to be in the idea stage for now. END COMMENT.

CURRAN

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