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Cablegate: Ambassador Discusses Iran, Azeri Gas, Nuclear

VZCZCXRO7543
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHAK #0195/01 0361322
ZNY CCCCC ZZH
P 051322Z FEB 10
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC PRIORITY 2016
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHAH/AMEMBASSY ASHGABAT PRIORITY 1987
RUEHKB/AMEMBASSY BAKU PRIORITY 1666
RUEHMO/AMEMBASSY MOSCOW PRIORITY 5688
RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 000195

SIPDIS

STATE FOR EEB/S-EEE RICHARD MORNINGSTAR
STATE PLEASE PASS TO USTDA: DAVID HESTER
DOE FOR OFFICE OF RUSSIAN AND EURASIAN AFFAIRS: LANA EKIMOFF

E.O. 12958: DECL: 02/04/2020
TAGS: ENRG ECON PREL TU
SUBJECT: AMBASSADOR DISCUSSES IRAN, AZERI GAS, NUCLEAR
POWER AND DOE ENERGY CONFERENCE, WITH ENERGY MINISTER YILDIZ

Classified By: AMB James Jeffrey for reasons 1.4 (b,d)

1. (U) Ambassador Jeffrey met with Energy Minister Yildiz on
February 3 to discuss the DOE energy efficiency conference,
expected nuclear power plant projects, Iran, and negotiations
with the Azeris on Shah Deniz gas. Yildiz, for reasons
unknown but appreciated, hauled ambassador out before the
media, which was awaiting the Iranian foreign minister's
visit to Yildiz, essentially to allow us to deploy our
warnings about Turkish-Iranian energy cooperation.

GOT WILL SUPPORT DOE ENERGY EFFICIENCY CONFERENCE
--------------------------------------------- ----

2. (U) DOE is working with the American Turkish Council (ATC)
to hold a regional (SE Europe and Caucasus) energy efficiency
conference in Istanbul June 3-4. Ambassador Jeffrey passed
Yildiz a letter from DOE Deputy Secretary Poneman inviting
Yildiz to be a key note speaker at the conference. He told
him that DOE and ATC expect to be able to finance the
conference with private support, but would like the
ministry's official support. Yildiz enthusiastically agreed.


GOT INTERESTED IN TDA ORIENTATION VISIT ON NUCLEAR ENERGY
--------------------------------------------- -------------

3. (U) When the ambassador raised the possibility of a USTDA
orientation visit on peaceful nuclear power generation,
Yildiz said he would be interested in sending a team to the
U.S. He said they have already formed a team to work on
regulatory and other aspects of nuclear power and they are in
touch with officials at the relevant U.S. agencies.

AKKUYU NUCLEAR PLANT TO RUSSIA BY IGA
-------------------------------------

4. (C) Yildiz confirmed that the nuclear power plant to be
built in Akkuyu will be awarded to Russia through an
intergovernmental agreement. He said they still plan to
build a second plant in Sinop, which they will open for bids.
Ambassador Jeffrey indicated that U.S. companies may be
interested in bidding on the project, noting that President
Obama has indicated openness to a new generation of safe,
clean nuclear power plants.

CONTINUED PURSUIT OF IRANIAN ENERGY DEALS
-----------------------------------------

5. (C) Ambassador emphasized that now is not the time for
Turkey to be doing hydrocarbon business with Iran. He
recognized that Iran is Turkey's neighbor and trading
partner, but stressed that now is not the time for business
as usual. He added that we do not believe Iranian
involvement in Nabucco is a good idea at this time. In
response, Yildiz only asked rhetorically, "Do you have any
alternatives for us?"

STILL SLOW PROGRESS ON SHAH DENIZ NEGOTIATIONS
--------------------------------------------- -

6. (C) Regarding negotiations with the Azeris on natural gas,
Yildiz said they have reached agreement on price for Shah
Deniz I gas. They have not agreed on Shah Deniz II volumes
or price, but the negotiations continue. He said they made a
reasonable proposal on volumes, which the Azeris are now
considering. He said the Azeris rejected Turkey's latest
offer on transit fees, but he thinks they will eventually
accept it. Yildiz assured us the Turkish side is being
reasonable and doing all it can to move the negotiations
forward.

COMMENT
-------

7. (C) Yildiz was especially upbeat throughout the meeting.
Notably, he refrained from expressing frustrations with the
Azeris or the lack of progress on negotiations. Regarding
the nuclear plants, given the frequent changes of plan thus
far, we do not take Yildiz's comment as final confirmation
the Sinop project will be awarded through an open tender,
though it does appear more and more certain the Akkuyu
project will go to the Russians. Whether coincidentally or
intentionally, Yildiz's schedule offered a final comment on

ANKARA 00000195 002 OF 002


the sincerity of Turkey's pursuit of Iranian energy:
immediately following our meeting, Yildiz received Iranian
Foreign Minister Mottaki. Yildiz's giving an impromptu press
conference with the ambassador just before that meeting,
allowing us to repeat in public our concerns about energy
cooperation with Iran, was frosting on the cake.
Jeffrey

"Visit Ankara's Classified Web Site at http://www.intelink.s
gov.gov/wiki/Portal:Turkey"

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