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 SGGA is focused on providing technical assistance to the Ministry of Mines and Petroleum (MoMP) to improve the country's gas sector. The project's quarterly report for the period of October 1 to December 31, 2014, highlights several key challenges and progress made during this period. One of the major issues faced by the project is the delay in the drilling contract with Turkish National Petroleum Corporation (TPAO). TPAO is approximately 334 days behind schedule, and the project team has requested a third extension of the performance period, which is pending consent by USAID. The delay is attributed to TPAO's failure to follow the specific requirements of the contract or Afghan customs procedures. The project team has taken several remedial steps to address this issue, including holding meetings with TPAO to obtain commitments to speed up the work. USAID has also informed TPAO that funding will be withdrawn unless the schedule problems are remedied. The project team has provided advice to the Afghanistan Petroleum Authority (APA) on the terms of the contract and law related to customs clearance. Another challenge faced by the project is the lack of cooperation from MoMP officials, particularly the APA staff. The APA staff has lost several key personnel, including the SGDP project manager, due to the loss of discretionary funding. This has raised serious concerns about MoMP's ability to effectively manage the TPAO contract. The project team is willing to consider funding the SGDP project manager to ensure continuity of the work. The project has also faced challenges in accessing field data and reserve estimates, which are necessary for the evaluation of gas fields and provision of reserve estimates. The project team has submitted a written request to MoMP for agreement to provide the needed data and enter into a confidentiality agreement on the use of the data by the contracted petroleum engineering firm. However, the proposal has been blocked by APA technical staff, and the project team is continuing to pursue the agreement. In addition to these challenges, the project has made progress in providing economic modeling to the US Defense Department in connection with a DOD proposal to provide payment guarantees for replacing diesel-generated electricity at Afghan National Security Forces (ANSF) bases with grid power. The project team has also assisted the US Department in connection with a DOD proposal to provide payment guarantees for replacing diesel-generated electricity at ANSF bases with grid power. Overall, the SGGA project is facing several challenges, including delays in the drilling contract, lack of cooperation from MoMP officials, and difficulties in accessing field data and reserve estimates. However, the project team is taking several remedial steps to address these issues and is making progress in other areas, such as economic modeling.