Sheberghan Gas Generation Activity (SGGA) Monthly Report March 1 – March 31, 2014

The project is funded by the United States Agency for International Development (USAID) and is jointly sponsored by USAID and the Government of the Islamic Republic of Afghanistan. The project's main objective is to increase gas production and supply to the national grid. The project is divided into several workstreams, including the Gas Workstream, Energy and Power Workstream, Capacity Building Workstream, Procurement Workstream, and SPMT Workstream. The Gas Workstream is responsible for managing the drilling contract, environmental compliance, and strategic support for the Sheberghan Gas Development Project (SGDP). The Energy and Power Workstream focuses on developing the energy and power infrastructure in the region, while the Capacity Building Workstream aims to build the capacity of the Ministry of Mines and Petroleum (MoMP) staff. The project has made significant progress in the past month. In the Gas Workstream, the project team delivered a memorandum to the MoMP project director, Zabih Sarwari, with technical recommendations for accelerating the Turkish National Petroleum Corporation's (TPAO) operations schedule for the Juma/Bashikurd work. However, TPAO rejected all recommendations. The project team also reviewed a request by TPAO to MoMP for consent to assign the drilling and re-entry contract to its Afghan subsidiary and made recommendations for documentation and conditions for consent. In the Environmental Workstream, the MoMP received the report of the National Environmental Protection Agency's (NEPA) expert panel on MoMP's application for a certificate of environmental compliance for the Juma-Bashikurd drilling and re-entry operations. The project team commented and circulated the report to SGGA and USAID for further comments. The project team also conducted a series of discussions with USAID regarding strategies for meeting gas processing needs for Sheberghan area gas production and supported USAID in its discussions with interested potential investors about infrastructure development options in Sheberghan. The project team met with USAID on several occasions, including a weekly meeting with Jules Jordy, John Stich, David Kraus, and Julie Southfield on topics including the tax audit, TPAO's contract tax and customs exemptions, and plans for the project. The project team also requested Sarwari to provide copies of TPAO weekly reports and to move forward on assigning a full-time, Sheberghan-based MoMP representative to oversee and report on TPAO contract operations. The project has faced several challenges, including TPAO's rejection of the project team's recommendations and the lack of response from MoMP on the matter of assigning the drilling and re-entry contract to TPAO's Afghan subsidiary. The project team continues to rely on its own sources for information about TPAO operations. The project's next steps include continuing to work with USAID to develop strategies for meeting gas processing needs for Sheberghan area gas production and supporting USAID in its discussions with interested potential investors about infrastructure development options in Sheberghan. The project team will also continue to work with MoMP to address the challenges faced by the project and to ensure the successful implementation of the project.