UPDATE 3-In split from SocGen, TCW's fortunes seen set to rise
By Greg Roumeliotis and Jessica Toonkel and Jennifer Ablan
* Putin visits Istanbul on Monday
* Divisions over Syria have strained relations
* Energy, business ties high on agenda
By Nick Tattersall
ISTANBUL, Nov 30 Turkey will press Russian President Vladimir Putin next week to cooperate in engineering as rapid an end as possible to Syrian President Bashar al-Assad's rule and try to assuage his fears Moscow could lose out after Assad's departure.
He is likely to face an uphill struggle.
Prime Minister Tayyip Erdogan sees Putin as key to quelling a conflict that has sent over a hundred thousand refugees fleeing to Turkish soil and stirred warnings of a sectarian war beyond Syria's borders.
Turkey's carefully nurtured relationship with Russia, governed by its need for energy supplies and mutual security interests across an array of regional hotspots, has already been strained by differences over Syria.
Moscow, one of Syria's closest allies, has vetoed three U.N. Security Council resolutions aimed at putting pressure on Assad, blocking Turkish, Western and Arab efforts to provide U.N. support for the rebel forces trying to topple him.
There is little sign of a change in stance ahead of Putin's visit to Ankara beginning on Monday.
"At the moment, Russia is holding the key ... Russia's attitude is crucial," Erdogan said this week on his way back from a visit to Spain, according to Turkey's Hurriyet newspaper.
Turkish officials say Russia must be assured it does not stand to lose from the going of Assad, who has been Moscow's chief Middle Eastern ally. Syria has been a major client for Russian arms and hosts a naval maintenance facility that is Russia's only military base outside the former Soviet Union.
The loss of influence in Libya after the Western operation to topple Muammar Gaddafi has also made its mark in the Kremlin.
"Russia must be made part of the engagement process ... It's more important and possible to convince Russia to persuade the Assad regime to compromise, rather than to persuade Russia to support the opposition," a source close to the government said.
Moscow has argued in the past that the rebels are dominated by radicals and jihadis who would change the face of Syria if they took power. Turkey will reason that the longer the conflict continues, the greater will become the traction of those very forces. Time is of the essence.
"A stake in what you might refer to as a new Syria shall be the only way. You can't bribe a global power such as Russia. You should try to create a win-win situation," he said.
As Syria's new opposition coalition consolidates, Russia has stepped up efforts to tell the world it is not on Assad's side, part of a bid to cast itself as a neutral player with an interest in peace alone. But it has shown no signs of shifting to join Western rivals in backing the rebels.
Ankara is worried about Syria's chemical weapons, a growing refugee crisis, and Syrian support for Kurdish militants on its soil. It has been a major opposition backer, leading calls for international action and repeatedly scrambling jets to the border in a warning to Damascus.
"The Syrian stalemate can't go on for ever ... The remedy is not to continue but to stop the conflict," said Ibrahim Kalin, Erdogan's foreign policy adviser. "If Assad goes today, what will the world lose? Now is the time to talk."
Putin's visit, as officials on both sides are keen to point out, will also focus on a long and deep business and energy relationship.
Russia provides nearly two-thirds of Turkey's gas supplies and often ramps up its exports to the country during frequent cuts in Iranian gas supplies in the winter.
Russia is also set to help build Turkey's first nuclear power plant, while Russia has long been one of the largest markets for Turkish construction firms.
"The main items on the agenda will be meeting Turkey's natural gas demand during the winter, cooperation on the nuclear power plant ... and other energy issues," said a senior Turkish official.
Improved relations with Russia are invaluable for Turkey at a time when its leading role in opposition to Assad has cost it other friendships in the region. But it has been a fragile relationship in recent months.
Russia voiced strong opposition last week to Turkey's request that NATO deploy surface-to-air Patriot missiles to protect its border with Syria, instead reiterating its proposal for a direct line of communication between Ankara and Damascus.
Turkey and NATO have insisted that the deployment would be a defensive measure and not, as Syrian allies including Russia and Iran perceive, a first step towards implementing a no-fly zone on Syrian territory.
Erdogan's public accusation that Russia was ferrying military equipment to Damascus after Turkish jets forced down an airliner flying from Moscow in October also did little to foster his good relations with Putin.
A month and a half after the plane was intercepted, the Turkish authorities have yet to give any public details on what was in the seized cargo, which Erdogan said included Russian-made munitions bound for Syria's defence ministry.
Putin had been expected to visit Turkey the following week, but his trip was postponed hours before the plane was grounded.
"The plane crisis has surely caused some issues, but the problems will be resolved, even if traces remain. The visit would have been in a better mood if Putin had not cancelled last time," said a second Turkish official.
For more than a year, the two have kept disagreement over Syria from spilling into a relationship governed by business.
Russia plans to build its 63 billion cubic metre South Stream gas pipeline through Turkey's waters to feed Europe. The plan raises Turkey's profile as a partner in the project and gives both countries incentives to maintain friendship.
Russian Energy Minister Alexander Novak is due to meet his Turkish counterpart during the visit and visits to a car manufacturing plant and to the headquarters of Turkey's Denizbank, bought by Russia's top lender Sberbank in June, are also on the agenda.
"Erdogan and Putin have other projects in the bag and they will be discussed as well," the Turkish official said.
State-controlled Russian energy group InterRao is interested in acquiring AEI Energy Holding, the Turkish subsidiary of U.S. company AEI that owns 90 percent of a 478 megawatt power station located 100 km from Istanbul.
Sources familiar with the matter say the deal has been held up for months amid tensions between Moscow and Ankara but Putin's visit may help get it over the line. Houston-based AEI is in the process of selling off its international assets as it winds up its operations.
(Additional reporting by Douglas Busvine and Steve Gutterman in Moscow, Ralph Boulton in London)
By Greg Roumeliotis and Jessica Toonkel and Jennifer Ablan
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