TURKS SHUN GAS PROJECT IN GENOCIDE ROW
Carl Mortished, International Business Editor

Times Online, UK
April 6 2007

Turkey has pulled out of talks with Gaz de France over a ~@4.5 billion
(£3 billion) gas pipeline project in protest over a French law that
prohibits denial of the massacre of Armenians during the Ottoman
Empire.

The Nabucco project, a 3,300km pipe, which would bring central Asian
gas to Europe, is seeking support from leading gas utilities, but
the project is becoming embroiled in political difficulties.

Botas, the Turkish state pipeline company, is reported to oppose the
participation of Gaz de France because of the French Government’s
stance on the Armenian issue.

The controversial Bill, passed last year in the French parliament,
makes it a crime to deny that a genocide of Armenians took place in
Turkey during the First World War.

The row with Gaz de France occurs as the Nabucco promoters prepare
to announce an "open season" for gas buyers interested in a share of
the Nabucco gas. A slate of potential buyers is needed if the project
is to secure financing.

The Nabucco project is led by OMV, the Austrian energy group, and is
vigorously promoted by the European Commission, which wants to lessen
Europe’s reliance on Russian and Algerian gas.

The Commission is expected soon to appoint a high-level official
to promote and coordinate the project. Gaz de France would join a
consortium that, in addition to OMV, includes Hungary’s MOL, Botas,
Bulgargas and Romania’s Transgas.

Rival firms that might seek a stake in Nabucco as the sixth partner
include Total, E.ON and RWE of Germany.

Turkey has ambitions to become a hub for the collection of gas from
the Caspian and the Middle East and its onward transport to Europe.

However, the promoters of Nabucco face a greater political obstacle in
Gazprom, which has the lion’s share of the Eastern European gas market
and has voiced its strong opposition to a rival transit pipeline.

The first link in the chain is the Shah Deniz project, a pipeline
recently completed by a BP consortium that traverses the Caucasus,
bringing gas from the Caspian Sea to Erzurum, a gas hub in Eastern
Turkey.

In February Greece and Italy agreed to work together on a 212 km
pipeline across the Adriatic. Talks have also commenced between Shell,
Botas and the Iraqi Government over the export of Iraqi gas to Europe,
via Turkey. At the same time, negotiations continue between Azerbaijan
and Turkmenistan over a sub-sea pipeline that would link with gas
reserves further east.

War of words

The French National Assembly sparked a diplomatic clash with Turkey
when it approved a Bill that would make it a criminal offence to
deny that the deaths of hundreds of thousands of Armenians in 1915
amounted to genocide (Adam Sage writes).

The Bill infuriated the Government and public opinion in Turkey,
where the issue is highly sensitive and mention of the term genocide
is seen as a slight on the national honour. Feelings were already
running high after the French parliament approved an initial law in
2001, which formally described the tragedy as genocide. The Bill goes
further, threatening negationists with a year in prison and a fine
of ~@45,000 (£30,600). Although the text would have to be approved by
the National Assembly to become law, it has already damaged relations
between Ankara and Paris.

The Turkish Army, for instance, announced that it was suspending all
cooperation with the French military. Christine Lagarde, the French
Foreign Trade Minister, said that French businesses, which export
an annual total of ~@4.7 billion products and services to Turkey,
could be hit.

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