US embassy cable - 04ANKARA3900

C O N F I D E N T I A L ANKARA 003900 
 
SIPDIS 
 
STATE FOR CBED AMBASSADOR MANN 
 
E.O. 12958: DECL: 07/12/2014 
TAGS: ENRG, EPET, ETRD, ETTC, IR, TU 
SUBJECT: MFA DISPUTES REPORT THAT TURKEY AND IRAN AGREED ON 
GAS EXPORTS TO EUROPE 
 
REF: ANKARA 3336 
 
Classified By: Econ Counselor Thomas Goldberger for reasons 1.4 
 (b) and (d) 
 
1.  (U) According to a report carried by the Turkish online 
news service Zaman and several Iranian news outlets, Iran has 
offered to reduce the price of its natural gas exports to 
Turkey if Turkey agrees to facilitate the transport of 
Iranian gas to Europe.  The report added that the deal was 
reached last week in Turkey during the visit of Iranian Oil 
Minister Zengene.  Meeting with Econoffs July 12, MFA Energy 
DDG Hakki Akil denied that Turkey had reached any deal with 
Iran involving Iranian gas exports to Europe and called the 
press reports "disinformation." 
 
2.  (C) Comment:  This is not the first time we have seen 
reports of deals with Iran that have proved false.  It is 
likely that this report is false, as well.  But we would not 
be surprised if there was a germ of truth -- at least that 
the Iranians made the offer.  Turkish officials have been 
seeking a price reduction, similar to the one they got from 
Gazprom, but with little success.  Turkish officials have 
repeatedly told us how difficult and unreasonable the Iranian 
have been in these discussions. 
 
3.  (C) Over the past months in our conversations with 
Turkish energy officials, it has become clear that they are 
under increasing pressure from Iran and Europe to allow 
Iranian gas to transit Turkey to Europe, and they are 
concerned about the U.S. reaction.  (As reported reftel, 
Energy Minister Guler asked Ambassador Edelman June 8 for 
information about ILSA and how it would impact Turkey's role 
as a transit country.)  The sweetener of a price reduction -- 
something that the GOT desperately wants to fulfill populist 
campaign pledges to reduce energy prices -- will up the ante 
considerably.  Akil said that although Turkey is not now 
obligated under the Energy Charter to allow the transit of 
Iranian gas, one day Turkey will succumb to European and 
Iranian political pressure unless an alternative supply 
source -- such as Turkmenistan -- is found to satisfy 
Europe's demand. 
DEUTSCH