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

The project is managed by Advanced Engineering Associates International, Inc. (AEAI) and is jointly sponsored by the United States Agency for International Development (USAID) and the Government of the Islamic Republic of Afghanistan. The project's primary objective is to support the development of the Sheberghan Gas Development Project (SGDP) by providing drilling contract management support, natural gas development support, and capacity development. The project's scope includes the development of gas reserves, gas processing strategy, and gas-to-power symposium planning. In October 2014, the project team achieved several milestones. The Minister of Ministry of Mines and Petroleum (MoMP) issued a unilateral contract extension notice to the Turkish National Petroleum Corporation (TPAO), extending the completion time by 30 days. However, the Afghanistan Petroleum Authority (APA) was not consulted on this extension and was not informed until after it had been issued. The project team also received a progress report from TPAO describing the progress on the gas field roads, camp, and drilling locations, which was only 80 percent complete. The project team also met with various stakeholders, including the APA Director General, the Sheberghan Gas Development Project (SGDP) Project Manager, and the Task Force for Business and Stability Operations (TFBSO) Director of Operations. The meetings focused on discussing possible dates for the Gas-to-Power Symposium, TFBSO's draw-down plan, and areas of collaboration. The project team also faced several challenges, including TPAO's continued poor performance, which will result in being unable to get completed new well data for the Juma-Bashikurd Field in time to include new data in any reserve study. The project team advised that contract termination offers the most prudent course of action for both USAID and MoMP. For the next month, the project team plans to provide analysis to MoMP for consideration of termination of the TPAO contract, and if termination is decided on, provide analysis and data supporting the termination and resolution of any claims. The project team will also continue to support the development of gas reserves, gas processing strategy, and gas-to-power symposium planning. The project's geographic focus is on the Sheberghan region of Afghanistan, and the project's timeframes are from October 1 to October 31, 2014. The project's recommendations include the termination of the TPAO contract and the development of a gas processing strategy.