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Are Turkey And Iran Becoming Gas Partners?

November 24, 2008

Are Turkey And Iran Becoming Gas Partners? Martin McCauley writes: Ankara and Tehran have just signed an agreement to develop gas deposits in Iran and transport some of the gas to Europe. The Turks acquire operational rights in three offshore gas fields in the South Pars region, off the southern port of Assiluyeh.

Turkey is to produce 46 million cubic metres of gas daily, with half of this amount used for its own consumption. A 1,850 km pipeline is to be built to take the gas to Bazargan on the north-west border of Iran and Turkey. It can then be moved on to Europe. The whole project will cost at least $12 billion.

Sean McCormack, US State Department spokesman, when asked to comment on the project, dismissed it by saying that Iran has signed many oil and gas deals with other countries but they never came to anything.

Is he right? The reason why nothing significant has so far emerged from various Iranian deals was US pressure. Washington wishes to isolate Iran and force it to give up its ambitions to enrich uranium for military purposes. So what is the reasoning behind Turkey’s recent move? After all, it is a member of NATO and has little to gain from antagonising the US.

There appears to be two main reasons why Ankara has launched this initiative at the present moment. The first is the ongoing conflict with the Kurdistan Workers’ Party (PKK). Turkey needs all the help it can get to contain the violent wing of the Kurdish independence movement. Kurds are to be found in Iran, Iraq and Turkey. Mountain bases in north-west Iran are being used by Kurdish insurgents. The price of cooperation with Tehran is a gas deal. The Iranians have been pressing for an agreement for several months and criticised Turkey for its delaying tactics. They pointed out that Turkey was being offered the deal without competitive tendering. Ankara has decided to accept the gas deal and put it on the back burner. It can be activated when the political situation is opportune.

Another reason is to put pressure on the Americans in Iraq. Originally Turkish companies were excluded from tendering for oil and gas contracts in Iraq. The US ambassador told the Turks they should buy gas from Iraq and not Iran. The Turks pointed out that this was not possible because they were excluded from the Iraqi gas market. Washington put pressure on the Baghdad government and Turkish companies were permitted to compete for gas contracts in Iraq.

Two days after the Iran gas deal was signed, Turkish companies signed agreements to exploit, manage and market gas in Iraq.

The timing of the Iran deal coincides with the final days of President George Bush’s administration and the emergence of the President-elect Barack Obama administration. In other words, an excellent time to strike deals which the Bush administration strongly had opposed.

With Hillary Clinton running the State Department American policy will probably be less confrontational. Obama will concentrate his efforts on solving the huge economic problems confronting him. The astute Turks have chosen the right moment to steal a march on their international competitors.

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