Turkey and Iran Sign Accord on Natural Gas Cooperation

Publication: Eurasia Daily Monitor Volume: 5 Issue: 224

Ankara and Tehran signed an accord strengthening agreements on developing Iran’s gas fields and transporting Iranian gas to Europe. With the agreement, Turkey secures the operation rights for three offshore gas fields in Iran’s South Pars region, off the southern gulf port of Assaluyeh. Under the accord, Turkey will produce some 46 million cubic meters of gas per day and may use half of that amount itself. It is estimated that Turkey will spend $12 billion on developing the project, which envisages the joint construction of a 1,850-kilometer (1,200-mile) pipeline from Assaluyeh to the Bazargan border area with Turkey in northwestern Iran (Hurriyet Daily News, November 20).

When asked to comment on the accord, U.S. State Department spokesman Sean McCormack said that the Iranian Government liked to sign such agreements but they did not really came to anything (www.state.gov, November 19).

It seems that Turkey’s natural gas accord with Iran is a sort of “mehter march” policy, which requires two steps forward and one step back until the final destination is reached. In contrast to McCormack’s view, the agreement between the two countries reflects strategic thinking on Turkey’s part before taking such controversial steps. The Iranian side was applying pressure on Turkey to sign the recent accord. In June Ahmed Noorani, Iran’s economic and trade attaché in the Iranian Embassy in Ankara, said, “Iran is ready to sign the natural gas contract but Turkey wants to work on details.” Noorani further urged Turkey to sign the contract; “because the South Pars gas drilling site has been given to Turkey without competitive bidding [although] several problems have occurred on the Iranian side. We are expecting to sign the final agreement" (See EDM, June 24). In October the Iran Daily reported that “Iran and Turkey have resolved problems on a planned investment in the South Pars gas field and they may sign a production accord as early as November” (Iran Daily, October 26).

The question is, would Turkey jeopardize its relations with the United States by bowing to Iranian pressure to initiate such project? If not, why then is Turkey maneuvering to sign these accords with Iran? It is in the interest of Turkey to build a pipeline from Iran to Europe, but Turkish policy-makers know that the U.S is opposed to such a project and Ankara would not want to put its relations with the United States at risk for the Iranian gas pipeline. The Turkish motivation for signing the accords might have two aims.

First, because of its Kurdish problem, Turkey needs to cooperate with Iran to reduce the PKK’s threat. In order for Turkey to keep Iran on its side, Turkey needs to deal with Iranian expectations. Therefore, by signing the accords Turkey keeps Iran on its side against the PKK, while waiting for an opportunity at some time in the future to launch the project if the international opinion permits it.

Second, by placing the Iranian card on the bargaining table, Turkey wants to persuade the U.S authorities to ensure completion of the Iraqi natural gas project. When the Baghdad government excluded Turkish companies from investing in Iraqi energy sites, Turkey successfully played the Iran card to persuade the United States to pressure the Iraqi government into including Turkish companies in exploring Iraqi oil and natural gas fields. At the time of the Iranian gas accords in June and July, U.S Ambassador to Turkey James Franklin Jeffrey met with Energy Minister Mehmet Hilmi Guler and asked him to discontinue the energy projects with Iran. The ambassador suggested buying energy from Iraq instead (see. EDM, June 17, 24). A month later, under pressure from the United States, Iraqi authorities finally agreed to include Turkish companies in oil and natural gas exploration plans (see EDM, July 17).

Indeed, only days after Turkey’s recent accord with Iran, the Turkish Petroleum Corporation (TPAO), the state-owned Turkish Pipeline Corporation (BOTAS), and Shell Energy Europe B.V. signed a preliminary contract to explore, manage, transport, and market natural gas in Iraq (Today’s Zaman, November 21)

It seems that U.S policy makers are looking in a different direction to understand Turkey’s attitude about the energy accords with Iran. Policy makers in Washington want to know if these agreements will lead to any results. Ankara’s expectations may not, however, be concentrated on whether the gas project is finalized. Instead, Ankara seems to be asking itself, “What can I get from keeping Iran on my side?” The energy accords do not have to lead to production and tangible results at this point. It is very useful for Ankara to keep Iran as an ally against the PKK and also use the Iranian alternative as a bargaining chip. By keeping the bureaucratic process alive, Turkey does not risk damaging its relationship with the United States but is able to keep Iran on its side. For Tehran, signing the agreements with Turkey, even if they do not produce any tangible results in the short run, will likely help end its economic isolation and improve its energy export options to Europe.