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Viewing cable 06ANKARA1705, TURKEY: BTC OIL ADVANCES - ERZURUM AS ENERGY CROSS-
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
06ANKARA1705 | 2006-03-30 14:29 | 2011-08-24 01:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Ankara |
VZCZCXRO7214
RR RUEHAG RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN RUEHLZ
RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHAK #1705/01 0891429
ZNR UUUUU ZZH
R 301429Z MAR 06
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 4417
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RHEHAAA/NSC WASHDC
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUEUITH/ODC ANKARA TU//TCH//
RUEHIT/AMCONSUL ISTANBUL 0191
RUEHDA/AMCONSUL ADANA 0581
UNCLAS SECTION 01 OF 02 ANKARA 001705
SIPDIS
USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK
DOE FOR CHARLES WASHINGTON
SENSITIVE
SIPDIS
EUR ALSO FOR DAS BRYZA AND MANN
E.O. 12958: N/A
TAGS: EPET ENRG EINV TU IR
SUBJECT: TURKEY: BTC OIL ADVANCES - ERZURUM AS ENERGY CROSS-
ROADS
REF: ANKARA 1527
ANKARA 00001705 001.2 OF 002
Sensitive But Unclassified. Please Handle Accordingly.
¶1. (SBU) SUMMARY: With first oil at Pump Station 3, BTC is
still on track for first tanker loading at Ceyhan on May 27.
The project has achieved good "buy-in" from the local
population from jobs and its community programs. Nearby
major city Erzurum hopes to benefit more from development as
an energy transit cross-roads, but its rigorous conditions
leave it very dependent on state support. End Summary.
--------------------------------
BTC Pump Station Three Goes Live
--------------------------------
¶2. (SBU) Energy Officer visited BTC Pump Station Number 3
(PT3) near Erzincan, Turkey on March 24. The station was
astir with arrival of first oil only a few days before on
March 20 (substantially on current schedule for first tanker
load at Ceyhan on May 27). BOTAS Station Manager Murat
Erkan took Energy Officer through the "red zone" (pumping,
piping, and scraping facilities), under higher security
procedures now that the facility had gone "live". He
showed the two newly arrived "pigs" (pipeline testing units)
that had preceded the first oil, noting how little visible
wear and tear were evidenced after the journey from PT2.
Hot testing of the relief facilities, pipe valves, engines,
etc was underway with a target of sending oil onwards on
April 4. He said operation of Pump Stations 1 and 3 would
be adequate for initial levels of BTC pipeline oil flow.
¶3. (SBU) The PT3 manager insisted that relations were good
between BOTAS (prime contractor) and the BTC consortium
(owner, represented by BP) at the site. On the subject of
disputed cost over-runs between BTC and BOTAS, a BOTAS
contact called Energy Officer during his visit and
complained about BP leaking confidential negotiations to USG
officials. He expressed hope for reaching an agreement, but
noted that BOTAS was preparing for potential international
arbitration on covering $334 million in cost overages
related to delays and (what BOTAS argues are) scope changes
(Ref).
¶4. (SBU) Energy Officer was impressed with visible security
and safety at the PT3 site. The mountain-top station was
surrounded by watch-towers, two perimeter fences, and an
inner fence securing the red zone. Unlike at PT1, the
gendarmerie station was not adjacent to the station, but the
gendarmerie had established its camp at a nearby village.
-------------------------
Erzurum: Look Hard at BTC
-------------------------
¶5. (SBU) Erzurum (Eastern Turkey's nearby regional center)
officials and interlocutors were uniformly positive about
BTC, although some university students were skeptical of the
value of transit to Erzurum and Turkey. Officials and
university professors were unanimous in recognizing that BTC
brought significant present and future benefits in fees,
regional linkages, and experience for the GOT and BOTAS.
PT3 has brought significant construction employment,
schools, and other social/education benefits to local
villagers. Many Erzurum trades-people confused BTC with the
municipal natural gas distribution project, contracted to
Turkish Palen Company. Chamber of Commerce President
Muammer Cindiller told Energy Officer that although the
connections to natural gas were behind schedule, there was
already improvement in the vexing problem of pollution as
gas replaces the imported dirty Russian coal. He admitted
that people readily accepted gas for cooking, but were
worried about price of gas for heating.
¶6. (SBU) Deputy Mayor Eyup Tavlasoglu noted that people
supported the arrival of BTC, but it was hard for the
consortium to meet all their raised expectations for jobs
and benefits. Officials were also optimistic about the
connection of the South Caucasus (gas) Pipeline to the
ANKARA 00001705 002.2 OF 002
Turkish grid at Erzurum (also the connection for the spur
from Iran), noting that Erzurum was developing as a regional
energy cross-roads. The Chamber President advocated the
idea of a refinery in Erzurum which could use BTC oil and
serve eastern Turkey (Energy Officer politely pointed out
that the consortium would probably not be interested in that
business investment).
--------------------------------------------- --------
Erzurum's Dependency on the State - Tourist Ptential
--------------------------------------------- --------
¶7. (SBU) Officials lamented Erzurum's natural challenges: a
long, rigorous winter and general lack of development in
Turkey's east, expressing a dependency on the state to help
Erzurum, because the private sector was generally unable to
establish investment feasibility. The Chamber President
listed Erzurum's main endowments as the 40,000 student
Ataturk University, its research hospital (which had treated
suspected avian influenza cases in January, of which there
was one confirmed case), and the separate state and private
hospitals. University officials were hopeful that Erzurum
could gain a future Winter Universiades competition,
leveraging the proximate, world-class skiing, with the need
for state support to increase skating facilities. The
University Hospital avian influenza expert advocated outside
support to establish a testing lab in Erzurum. All
officials touted Erzurum's ski center, located only 8 km
from the city, and now catering mainly to Russian tourists.
--------------------
No Iranian Influence
--------------------
¶8. (SBU) All Erzurum interlocutors were unanimously
insistent that there was not significant Iranian influence
in Erzurum. The Deputy Mayor pointed out that the Iranian
Consulate (only diplomatic representation in the city) was
opened during the time of the Shah when there was more
bilateral commerce and Iranian tourists. All officials said
the consulate was now low profile and barely open. In
response to Energy Officer's observation of a minority of
older women clad in apparent chador-burka style full body
covering garb, officials claimed that these were not at all
related to Iran; rather, these were remnants of Erzurum's
traditional "ehram" attire, suitable for the cold and wind
(but only used by women). All officials emphasized the big
cultural and religious differences between Sunni Erzurm and
Shia Iran that militate against Iran having significant
influence.
-----------------------------
Tough Crowd at the University
-----------------------------
¶9. (SBU) Energy Officer addressed a standing room crowd of
about 250 students from a variety of departments at Ataturk
University on "East-West Energy Corridor; Erzurum Connects
to the Global Economy". Students asked tough questions that
indicated great skepticism about U.S. policy in Iraq and the
Middle East and with respect to Iran. Students in Erzurum
appear to have the same concerns on these issues exhibited
elsewhere in Turkey.