By Seyhmus Cakan
DIYARBAKIR, Turkey, Dec 10 (Reuters) - Turkish authorities have shut down a small pipeline built by smugglers to carry illegal oil from Iran, officials said on Monday, a new twist as Western sanctions against Tehran bite.
Along with the 3-km (1.9-mile) pipeline, Turkish security forces dismantled a rudimentary, hillside refinery with storage capacity of 25,000 litres of crude near the town of Semdinli in Hakkari province, the governor's office said in a statement.
On Friday, the United States extended 180-day waivers on sanctions aimed at curbing Tehran's nuclear programme to Turkey, China, India and other countries in exchange for their reducing purchases of Iranian oil. [IDl:nL1E8N7AWN]
Before U.S. and European Union sanctions, Turkey imported more than half of its crude from Iran. It slashed Iranian oil purchases by 20 percent in June, though imports have fluctuated in the months since.
Security forces fighting Kurdistan Workers Party (PKK) guerrillas, which have waged a 28-year armed campaign in the region, stumbled upon the makeshift smugglers' operation on Saturday, the governor's office said.
"A 3,000 metre pipe was installed to the facility from Iranian territory," it said. "Rooms with generators behind the storage facility were discovered."
Fuel from Iran and Iraq has been smuggled into Turkey since at least the first Gulf War in 1991, much of it sneaked past customs officials by road or in containers strapped to the backs of donkeys through difficult mountainous terrain.
Running contraband across Turkey's eastern frontier is a treacherous business. The military killed 35 smugglers in December 2011 in an air raid after mistaking them for members of the PKK, considered a terrorist group by Ankara, the European Union and the United States.
It was not immediately clear who had built the link and refinery and no arrests had been made, police said. (Additional reporting by Humeyra Pamuk in Dubai, writing by Ayla Jean Yackley; editing by Nick Tattersall and James Jukwey)