Afghanistan: Gas Development Master Plan

Sovereign Project | 47018-001

Summary

There is a critical need to develop a gas sector master plan for Afghanistan's emerging gas sector. The master plan would cover a 20-year horizon (2015-2035) and would entail (i) preparation of gas demand and supply outlook and scenarios; (ii) development of market assessments and netback analysis; (iii) review current policies and plans in context of gas development; (iv) assessment of the financial requirements and needs; (v) evaluation of pricing options for various segments viz domestic sales and transit/exports; (vi) develop a planning model and train Ministry of Mines and Petroleum staff on its use; (vii) assessment of environmental, socioeconomic, and non-monetary impacts; (viii) review of other countries' experiences with gas supply chain development including compressed natural gas (CNG) sector; and (ix) formulation of an Afghanistan Gas Sector Master Plan and Implementation Strategy (with sequencing of priority investment projects).

Latest Project Documents

Title Document Date
Gas Development Master Plan Jul 2013

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Project Name Gas Development Master Plan
Project Number 47018-001
Country Afghanistan
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8401-AFG: Gas Development Master Plan
Technical Assistance Special Fund US$ 700,000.00
Afghanistan Infrastructure Trust Fund US$ 800,000.00
TA 8401-AFG: Gas Development Master Plan (Supplementary)
Afghanistan Infrastructure Trust Fund US$ 200,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Partnerships
Private sector development
Sector / Subsector

Energy - Energy sector development and institutional reform

Gender Equity and Mainstreaming No gender elements
Description There is a critical need to develop a gas sector master plan for Afghanistan's emerging gas sector. The master plan would cover a 20-year horizon (2015-2035) and would entail (i) preparation of gas demand and supply outlook and scenarios; (ii) development of market assessments and netback analysis; (iii) review current policies and plans in context of gas development; (iv) assessment of the financial requirements and needs; (v) evaluation of pricing options for various segments viz domestic sales and transit/exports; (vi) develop a planning model and train Ministry of Mines and Petroleum staff on its use; (vii) assessment of environmental, socioeconomic, and non-monetary impacts; (viii) review of other countries' experiences with gas supply chain development including compressed natural gas (CNG) sector; and (ix) formulation of an Afghanistan Gas Sector Master Plan and Implementation Strategy (with sequencing of priority investment projects).
Project Rationale and Linkage to Country/Regional Strategy

According to various studies conducted by the US Geological Survey and the Afghan Ministry of Mines and Petroleum, the total undiscovered technically recoverable natural gas reserves stand at 444 billion m3 in addition to the identified reserves of 75 billion m3. The development of Afghanistan's natural gas supply chain (production, transmission and allocation) must be the subject of deliberate planning in order to assure sustainable economic and market growth. In Afghanistan, there are three distinct gas basins with significant gas potential, namely (i) Amu Darya Basin (comprising North Basin West, North Basin East, Shirin Tagab, Saur-Kizbisay); (ii) Afghan-Tajik Basin (comprising Sanduqli, Mazar-i-Sharif, Ahmadabad, Balkh, Mohammad Jan Dagar, Shamar); and (iii) Kushka Basin (comprising blocks 1 to 6). Currently, the national gas utility, Afghan Gas Enterprise (AGE), owns and operates four gas fields producing a combined ~380,000 m3/day, nearly all of which is supplied to a single end-user, the Northern Fertilizer and Power Plant (NFPP). Recent seismic studies conducted by the United States Department of Defense also confirm significant gas potential in northern and western Afghanistan basins.

Afghanistan's gas sector is mired with infrastructure and regulatory deficits. Capital investment is needed through public sector funding, public-private partnerships, and private investments to exploit its potential and meet these challenges including (i) exploration for gas availability, (ii) strengthening and building processing and transmission infrastructure, (iii) strengthening regulatory and pricing issues, and (iv) building internal capacity of stakeholders. MoM has shared its envisioned timeline for capital investment priorities in its emerging gas sector, however, funding constraints have hindered the requisite development.

The government resolves to develop natural gas resources in a manner that maximizes benefits to Afghan society by supporting (i) growth in domestic public and private sector institutional competencies; (ii) growth in domestic industry and businesses, especially small- and medium-scale industries; (iii) increased employment across the country, especially in the less-developed and volatile provinces; (iv) infrastructure to support expanded economic activities, especially in less-developed provinces; and (v) expanded access to training and education in order to improve the quality of life for the people of Afghanistan while minimizing adverse social and environmental impacts.

Impact Improved energy security in Afghanistan
Project Outcome
Description of Outcome Improved Ministry of Mines and Petroleum capacity in the areas of investment planning and programming in gas sector supply chain
Progress Toward Outcome A team of consultants is engaged since 21 March 2014 for Project implementation. Achieving the outcome is underway by summarizing the gas sector development masterplan of other countries; presenting the reserve assessment and the preliminary potential demand assessments to the stakeholders through a workshop; acquiring the data on the upstream gas sector, including reserves and production data; studying the gas demand in different sectors; and collecting the first Geo Information System data.
Implementation Progress
Description of Project Outputs

A gas development master plan with the following features:

1. Assessment of gas resource potential (indigenous and possible importation options) and its optimized economic use and environmental impact

2. Determination of major allocation sectors and load centers, including gas demand forecast for a 20-year period (2015-2035)

3. Formulation of strategy for upstream, midstream and downstream gas sector development

4. Identification of investment projects to sustain Afghan gas sector and its linkages with power sector investments

5. Preparation of capacity development plan for Ministry of Mines and Petroleum to sustain gas sector master planning in Afghanistan

Status of Implementation Progress (Outputs, Activities, and Issues)

The TA has achieved the following tasks:

(i) summarized other countries experience on gas sector development masterplan;

(ii) additional workshop was held in November 2014 in Kabul, Afghanistan where results were presented on the reserve assessments and the preliminary potential demand assessments; and

(iii) submission of second quarter progress report on 22 January 2015.

The following tasks are expected to be achieved:

(i) interim evaluation report workshop is scheduled in April 2015

(ii) first draft of final report is scheduled in July 2015

Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design During the PATA design and implementation, ADB will closely engage with relevant development partners and other stakeholders to share the progress and receive input through consultative workshops.
During Project Implementation During the PATA design and implementation, ADB will closely engage with relevant development partners and other stakeholders to share the progress and receive input through consultative workshops.
Business Opportunities
Consulting Services Recruitment of the consultant firm will be undertaken using quality-based selection by full technical proposal in accordance with ADB's Guidelines on the Use of Consultants (April 2010, as amended from time to time).
Procurement Recruitment of the consultant firm will be undertaken using quality-based selection by full technical proposal in accordance with ADB's Guidelines on the Use of Consultants (April 2010, as amended from time to time).
Responsible ADB Officer Pei Ling Koh
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
Ministry of Mines_and PetroleumDaud Saba, MinisterAhmadyamaaimaq@gmail.comPashtunistan Watt, Kabul, Islamic Republic of Afghanistan
Timetable
Concept Clearance 20 May 2013
Fact Finding 03 Jun 2013 to 13 Jun 2013
MRM -
Approval 11 Jul 2013
Last Review Mission -
Last PDS Update 26 Mar 2015

TA 8401-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
11 Jul 2013 05 Aug 2013 05 Aug 2013 31 Oct 2014 14 Dec 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
900,000.00 800,000.00 100,000.00 0.00 0.00 0.00 1,800,000.00 11 Jul 2013 407,489.03
Title Document Type Document Date
Gas Development Master Plan Technical Assistance Reports Jul 2013

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