TURKEY SENDS BLUNT MESSAGE TO FRANCE
by Judy Dempsey – The New York Times Media Group

The International Herald Tribune
April 6, 2007 Friday

Ankara, angered by Armenian bill, halts pipeline talks

Turkey said Thursday that it was suspending talks with Gaz de France on
joining a major natural gas pipeline consortium, a political move aimed
at putting pressure on both Paris and Brussels that European Union
officials said could further delay one of the biggest energy projects.

Turkey, which is angry about a pending French bill that calls the
mass killing of Armenians during Ottoman rule a genocide, said that
it would await the outcome of presidential elections next month
in France before deciding if it would allow Gaz de France into the
five-nation consortium that is leading the project, the Anatolia news
agency reported, citing the Energy Ministry.

"We will decide according to policies to be followed after the
elections," a senior Turkish Energy Ministry official, who declined
to be identified, was quoted by Reuters as saying in Ankara.

Turkey’s blunt message to France was also seen as a reminder to
Brussels of the strategic importance of the country for the EU’s
energy ambitions at a time when talks on Turkey’s application for
membership to the bloc are going badly. Negotiators are about to
tackle the energy section of the discussions.

One European Commission official, speaking on condition of anonymity
because of the sensitivity of the talks, said Turkey "knows its value
as the major transit country for this project and is making the most
of it."

The official said that the suspension had more to do with politics
than the economics of the project, conceived in 2002 as the EU’s
first attempt at forging a common energy policy.

The consortium wants to build the ¤4.6 billion, or $6.2 billion,
Nabucco pipeline, which would bring natural gas from Iran and the
Caspian sea across Turkey to Western Europe, bypassing Russia. The
project is already a year behind schedule, with completion now planned
for 2012.

OMV, the Austrian energy company that heads the Nabucco consortium,
said Thursday that a feasibility study had been carried out, and
confirmed that it was seeking another partner to share the costs.

"Financing possibilities are currently being evaluated," said Andrea
Hof, a spokeswoman for OMV. The other consortium members include
MOL of Hungary, Transgaz of Romania, Bulgargaz of Bulgaria and Botas
of Turkey.

But she would not confirm that the consortium was holding talks with
Gaz de France, after talks with Total, also based in France, collapsed
this year. "There are ongoing talks with several possible partners,"
she said.

Reached by phone, a spokesman for Turkey’s Energy Ministry confirmed
that the consortium had been holding talks with Gaz de France. But
he declined to comment on any suspension, or if Gaz de France had
been notified.

"We do not want to comment on this because it is a political issue,"
the ministry spokesman said.

Turkey says that claims by Armenia that the Ottoman empire committed
genocide against 1.5 million Armenians during World War I are greatly
exaggerated.

Ankara protested loudly last year after the National Assembly of
France passed a bill that would make it a crime to deny that the
killings amounted to genocide. The bill still has to be approved by
the Senate before becoming law.

In Paris, a spokeswoman for Gaz de France would not comment on
Turkey’s decision, or even confirm that it was negotiating to become
part of the 3,300 kilometer, or 2,050 mile, Nabucco pipeline. "What
we can say is that we are interested in the project," Sabine Wacquez
said. By joining the Nabucco consortium, Gaz de France would be able
to further the diversification of its natural gas supplies.

Gaz de France this year agreed to a contract with Russia’s giant
state-owned energy company Gazprom. Gazprom will for the first time
use Gaz de France’s distribution network to sell Russian natural gas
directly to French consumers. In return, Gaz de France will receive
more Russian natural gas in the form of long-term contracts. France
already gets 16 percent of its total natural gas needs from Russia.

Natural gas accounts for 15 percent of all energy consumption; most
of the country’s energy needs are met by nuclear power.

Turkey, which is almost completely dependent on energy imports, hopes
Nabucco will give it the chance to become an energy hub in Europe. At
the same time, it wants to diversify its energy imports away from
Russia, on which it – like most of Europe – is very dependent.

Because of its location between Europe, the Caucasus and Central Asia,
Turkey has become strategically important for the energy ambitions
of both the EU and Russia.

Russia has already built the Blue Stream natural gas pipeline that
reaches Turkey by running under the Black Sea. Gazprom now plans to
extend this pipeline up through Romania and Serbia into Hungary with
Hungarian support, even though Hungary is a member of the Nabucco
consortium.

Ferenc Gyurcsany, the prime minister of Hungary, and Vladimir Putin,
Russia’s president, agreed last June to extend the Blue Stream pipeline
to Hungary.

During an interview last month, Gyurcsany said Nabucco was "a dream.
An old dream. We cannot heat apartments with dreams." He also said
that an extended Blue Stream project was much better organized.

Turkey has made threats against France before. After the vote in the
National Assembly, Turkey’s armed forces said that they would freeze
bilateral ties with its NATO ally. But officials at NATO say that
there has been no sign of any change in French-Turkish relations.

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