US embassy cable - 02ANKARA8141

C O N F I D E N T I A L ANKARA 008141 
 
SIPDIS 
 
 
STATE FOR E, EB/CBED, EB/ESC, EUR/SE 
STATE PASS NSC FOR QUANRUD AND BRYZA 
USDOC FOR 4212/ITA/MAC/OEURA/CPD/DDEFALCO 
USDOE FOR PUMPHREY/ROSSI 
 
 
E.O. 12958: DECL: 11/11/2012 
TAGS: ENRG, ECON, EPET, AJ, GG, KZ, TU 
SUBJECT: MFA ON TURKEY-GREECE GAS INTERCONNECT 
 
 
REF: ANKARA 8018 
 
 
Classified by Econ Couns Scot Marciel, Reason 1.5 (b,d) 
 
 
1. (C) Summary:  MFA Deputy DG for Energy Hakki Akil 
reiterated to Econ Couns BOTAS's request for USG assistance 
in encouraging the Greeks to accept paying a higher price for 
natural gas from Turkey in the short-term for the long-term 
benefits the Turkey-Greece interconnect would provide.  Akil 
also said that BOTAS General Manager Gokhan Bildaci was key 
to progress on East-West energy corridor issues, noting that 
he would encourage his AK party contacts not to replace 
Bildaci.  End summary. 
 
 
2. (C) MFA Deputy Director General for Energy, Water, and 
Environment Hakki Akil called in Econ Couns November 12 to 
request USG assistance in encouraging the Greeks to accept 
paying a slightly higher price for gas from Turkey (compared 
to the price it says it pays for gas from Russia) in the 
short-term for the long-term benefits the Turkey-Greece 
interconnect would provide.  BOTAS General Manager made the 
same request to econoff November 4 (reftel).  Akil said the 
Greeks claimed they could not accept a higher price than what 
they were paying Russia for gas; however, he was not 
convinced the price they quoted was the "real" price they 
were paying the Russians.  (Note:  Akil commented that it 
would be useful to know what the Europeans, including Greece, 
were paying Russia for gas, and asked if that was information 
the USG could provide.)  Still, Akil said, even if Greece did 
have to pay an additional USD five million more over two 
years for gas from Turkey (his quick estimate), wouldn't that 
be a small price to pay for a significant political and 
strategic returns? 
 
 
3. (C) Akil noted that, for its part, BOTAS was willing to 
waive all transit fees and offer Greece a price slightly 
lower (about one dollar) than its current lowest purchase 
price.  Based on figures provided by BOTAS (reftel), that 
would put DEPA's purchase price at about USD 122 per thousand 
cubic meters.  Once the (cheaper) Shah Deniz gas came online, 
Turkey and Greece could renegotiate a lower price.  Econ 
Couns responded that, while the U.S. did not want to 
intervene in DEPA-BOTAS negotiations, we did want to 
encourage progress on the Turkey-Greece interconnect.  He 
said he would pass this information on to EB/CBED Ambassador 
Mann, who would be in Athens the following week. 
 
 
4. (C) On the broader subject of Caspian gas to Europe, Akil 
said Turkey had been busy since MFA Deputy U/S Kilic and 
Ministry of Energy U/S Yigitguden's September meetings in 
Washington.  BOTAS now had signed memorandums of 
understanding to pursue interconnect options with Bulgaria, 
Hungary, Romania, Bosnia, and Austria.  He said the GOT 
appreciated our efforts with the Europeans, and looked 
forward to discussing the next stage of our joint "action 
plan" over the next month. 
 
 
5. (C) On other issues, Akil noted that Turkey had resumed 
the flow of gas from Iran on November 11, and would start 
receiving Blue Stream gas on December 20.  Reflecting on AK's 
election victory, he said he was certain that, at the 
Ministry of Energy, the Minister and Under Secretary would be 
replaced, but some of the Deputy Under Secretaries may 
remain.  He stated that he was mostly concerned about BOTAS 
General Manager Bildaci, noting that Bildaci was honest, 
smart, and extremely knowledgeable, particularly on the BTC 
contracts.  Akil said he would try to convince his friends in 
AK to keep Bildaci on as long as possible. 
PEARSON