US embassy cable - 05ANKARA1665

UNCLAS SECTION 01 OF 03 ANKARA 001665 
 
SIPDIS 
 
USDOC FOR 4212/ITA/MAC/CPD/DDEFALCO 
DOE FOR CHARLES WASHINGTON 
NSC FOR BRYZA 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EPET, ENRG, EINV, TU, IZ 
SUBJECT: CEYHAN: ENERGY HUB OF TURKEY'S ENERGY CORRIDOR 
 
REF: Ankara 1306 
 
Ankara 131 
 
Sensitive But Unclassified.  Please Handle Accordingly. 
 
1.  (SBU) SUMMARY: While the newly white-washed BTC oil 
terminal at Ceyhan bustles with final construction 
activity in advance of hoped-for first oil in late 
2005, the adjacent BOTAS oil terminal languishes for 
lack of oil from the pipeline from Iraq.  Along with a 
new imported coal-fired power plant providing 7 % of 
Turkey's energy needs - and visions of LNG processing 
in the future, Ceyhan represents a growing energy 
center in Turkey's vision of the East-West Energy 
Corridor.  End Summary. 
 
Fresh White Paint at BTC Oil Terminal 
------------------------------------- 
 
2.  (SBU)  Embassy Energy Officer and Adana Consulate 
Political Officer visited Ceyhan energy facilities on 
March 17, focusing first on the Baku-Tbilisi-Ceyhan 
(BTC) oil terminal.  According to BTC Engineering 
Manager Philip Jellard, the 2.5 km tanker loading 
jetty, seven oil storage tanks, and associated oil 
facilities are substantially complete and on-schedule. 
Nevertheless, he predicted that first oil tanker 
loading might not be achieved until October-November 
2005.  The BTC official noted that although the Turkish 
sub-contractor Tekfen had performed in good accordance 
with its contract, there were inevitably some delays 
and rough spots, requiring diligent oversight by the 
BTC consortium.  He noted that more serious delays in 
other sub-contracts in Lots A (starting at the Georgian 
border) and B had provided them with additional time to 
work out the wrinkles at the terminal.  USG officers 
climbed up one of the seven freshly painted white oil 
storage tanks (1 million barrels capacity each), which 
exhibit the newest and most rigorous technology in 
environment protection.  The officers walked the length 
of the new jetty, paralleling and mirroring the older 
BOTAS jetty, and saw the oil-handling equipment, 
including volatile organic compound (VOC) control 
equipment and other protective measures. 
 
3.  (SBU) Jellard mentioned the significant investment 
BTC was making in community development projects along 
the BTC corridor, including what he described as 
generous compensation to fishermen in a village near 
the jetty, who would lose access to some fishing area. 
He noted that the number of alleged "fishermen" had 
ballooned well beyond reality and many of the villagers 
had inflated expectations of what the "deep pocket" 
consortium would pay for compensation.   Energy Officer 
separately spoke with the head of a local environmental 
NGO, CETKO, who lamented the lack of empowerment and 
recognition of the passing of the traditional fishing 
village life.  (Note: our perception is that the BTC 
consortium has been diligently and appropriately 
investing in community development and compensation to 
local villagers to gain "buy-in" and support for the 
pipeline.  End Note.)  USG officials also met 
separately with Cukurova University International 
Relations Department Head Nejat Erk who, in his role as 
independent auditor of BTC terminal construction, 
complimented the level of excellence in Tekfen's 
performance as sub-contractor, especially in comparison 
to the other sub-contractors. 
 
Waiting for Oil from Iraq at the BOTAS Terminal 
--------------------------------------------- -- 
 
4.  (SBU) In marked contrast to the bustle at the 
adjacent BTC facility, the 30-year old BOTAS facility 
looked dated and forlorn, for lack of oil from the oil 
pipeline from Northern Iraq.  According to Assistant 
Director Kamil Tasanirmak, 12 of 15 oil tanks and the 
bulk of the facility (about 10 million barrels 
capacity) was dedicated to handling oil flow and export 
from the 1.5 million bpd capacity Iraq pipeline. 
Unfortunately over the last two years oil flow has been 
sporadic and undependable due to over 200 separate acts 
of sabotage on oil facilities in Iraq (per U.S. DOE's 
count).  BOTAS registered only about 78,000 bpd average 
delivery from Iraq in 2004.  Three smaller tanks are 
dedicated to the Turkish refinery company TUPRAS which 
has lately been obliged to import oil from tankers to 
provision by pipeline the Kirikkale Refinery near 
Ankara.  Although the tanks looked aged, and did not 
exhibit the same level of environmental protection as 
the BTC neighbor's tanks, BOTAS was actively assuring 
adequate maintenance of the facilities.  Tasanirmak 
noted that security on the facility was assured by the 
BOTAS guard force, supplemented also by the Jandarma 
corps.  Energy Officer noted manned raised guardhouses 
and armed roving guards along the fence line. 
 
5.  (SBU) USG officials observed fresh red, green, and 
blue painted pipelines on the facility.  Creative 
officials had stocked a number of antelope some years 
ago, and a herd frolicked around the pipes, similar to 
caribou around Prudhoe Bay in Alaska.  USG officials 
observed that the facilities appeared clean and well 
maintained; the BOTAS beach and surrounding sea and 
snow-capped mountains sparkled on this early spring 
day. 
 
Smokestack Attracts Environmentalists' Ire 
------------------------------------------ 
 
6.  (SBU) USG officials completed their tour of the 
Ceyhan energy hub with a visit to the nearby Sugozo 
thermal power plant.  According to Plant Director, 
Norbert Melcher, the 1200 MW plant provides 7% of 
Turkey's electricity supply.  He stated that the plant 
was fully compliant with World Bank and EU emission 
standards and imported clean, hard coal from Colombia 
and South Africa (estimated 3.3 million tons per year) 
- unloaded using an offshore handling facility, shuttle 
barges, and a jetty.  The imported bituminous coal is 
markedly cleaner (lower ash and sulfur content) than 
dirty lignite coal found in Turkey.  Energy Officer 
noted that the scrubbers, flue gas desulphurization 
plant, and electrostatic precipitators appeared 
comparable to those used in new power plants in the 
U.S.  Melcher said that German firm STEAG was the 51% 
owner and Turkish OYAK group held most of the balance. 
Perhaps reacting mostly to the aesthetic appearance of 
the seaside smokestack with visible emissions (mostly 
steam), the head of the environmental NGO CETKO 
separately expressed indignant criticism of the plant 
to Energy Officer.  Melcher described the range of 
cooperation of his plant with Cukurova University 
scientists closely tracking environmental effects. 
Energy Officer noted that the plant looked spanking 
clean and staircase railings had much less dust or ash 
to the touch than American plants he had visited. 
(Note: this plant replaced a number of dated, emission 
spewing plants and appears to be realizing its goals of 
being a good corporate citizen, providing jobs and 
reliable and efficient energy for the region.  End 
Note.) 
 
Comment: 
-------- 
 
7.  (SBU) With Turkey's ambitious plans for potential 
additional hydrocarbon projects - a prospective Samsun- 
Ceyhan "Bosphorus bypass" oil pipeline, a potential 
extension of the Russian Blue Stream natural gas 
pipeline from Samsun to Ceyhan, and a prospective LNG 
processing facility (either liquefying for export or 
expansion for import), Ceyhan looks set to continue to 
grow as an energy cross-roads with potential to provide 
additional hydrocarbons to Europe, the U.S., and the 
world.   With  improved security in Iraq, the BOTAS 
facility will regain its purpose.  In a separate 
presentation to students at Cag University, Energy 
Officer emphasized the good-news story of imminent 
completion of BTC as the first tangible step in 
realization of the "East-West Energy Corridor". 
Moreover, this represents a strong collaboration and 
confluence of economic and strategic interests between 
the U.S. and Turkey. 
 
8.  (U) Baghdad Minimize Considered 
Edelman