Sheberghan Gas Generation Activity (SGGA) Quarterly Report

The project is implemented by Advanced Engineering Associates International, Inc. (AEAI) and is supported by the Government of the Islamic Republic of Afghanistan. The project's main objective is to increase the production of natural gas and to improve the infrastructure for gas transportation and distribution. The project is divided into several components, including procurement technical assistance, DABS technical assistance, capacity development, and policy support. The procurement technical assistance component focuses on providing support to the Ministry of Mines and Petroleum (MoMP) in procuring goods and services for the project. The DABS technical assistance component provides technical assistance to Da Afghanistan Breshna Sherkat (DABS) in developing its power sector. The capacity development component focuses on building the capacity of the Afghan Gas Enterprise (AGE) and the Oil and Gas Survey (OGS) in gas processing and petroleum engineering. The policy support component provides support to the MoMP in developing policies and regulations for the gas sector. The project has made significant progress in the past quarter, with several major activities completed. The drilling contractor, Turkish Petroleum Corporation (TPAO), has confirmed the validity of its performance security with Habib Bank, and has submitted a request for a US-flag vessel determination of non-availability to the Ministry of Mines and Petroleum. The project team has also provided technical information to DABS on the memorandum of understanding it signed with Turk Energo for a 50MW gas-fired power plant to be located in Mazar. The project has also made progress in capacity development, with the successful collaboration between SGGA and the Task Force for Business and Stability Operations (TFBSO) to identify a scope of work and recruit a gas processing specialist to train and advise AGE and OGS on the commissioning and operation of the TFBSO-funded amine processing plant. The project team has also continued its technical trainings for AGE and OGS with its local engineering staff in Sheberghan. The project has faced several challenges in the past quarter, including delays in the drilling contractor's performance and the lack of responsiveness from the Kabul Vetting Support Office. However, the project team has taken several remedial steps to address these challenges, including preparing two letters to ensure that TPAO extended its performance security prior to expiration, and supporting APA in preparing a unilateral 30-day extension notice to extend the time for completion period until 10 October. The project has also made significant progress in economic modeling, with the development of an economic model for the power purchase agreement initiative between Afghan National Security Forces (ANSF) and DABS. The model has taken center stage in computing savings and has been under numerous refinements to support USAID and CSTC-A's power purchase agreement initiative. Overall, the SGGA project has made significant progress in the past quarter, with several major activities completed and several challenges addressed. The project continues to be on track to meet its objectives and to contribute to the development of the gas sector in Afghanistan.