Turkey's fractious gas plan

Tensions are growing between two formerly close NATO allies. Washington alienated Turkish opinion on October 10, after the House Foreign Affairs Committee approved a measure that would characterise the mass killing of Armenians in Turkey during the First World War as genocide. But the United States may feel Turkey is consorting with the enemy. Ankara will incur US wrath this week as it confirms plans to invest 3.5 billion dollars in an Iranian gas field.

A memorandum of understanding between Ankara and Tehran inked in mid-July will be finalised.  Turkey's state oil producer TPAO plans to develop gas and condensate deposits in three areas of the South Pars field.  Over half of the investment will go towards the cost of a pipeline that will transport up to 30 billion cubic metres of Iranian and Turkmen gas to Turkey and points west. 

Turkey is preparing to fund the project alone, as international financial institutions are loath to risk punitive measures from the US government.  Prime Minister Recep Tayyip Erdogan has defended his decision, declaring that no country could expect Turkey to give up relationships with its energy suppliers.  Such defiance adds diplomatic risks to an already expensive project.  However, if and when the nuclear standoff with Iran is resolved, Turkey can offer Europe an alternative to Russian and Algerian gas.