ESBD_File_318799_Final RFP 23-SLB-1-LP Lease of PSF Land for Storage of CO2 combined.pdf

Texas General Land Office and School Land Board -i- RFP No. 23-SLB-1-LP

TEXAS GENERAL LAND OFFICE

AND

SCHOOL LAND BOARD

are

REQUESTING PROPOSALS

for

Lease of Permanent School Fund Land for Storage of Carbon Dioxide in Nueces, Aransas, and Kleberg Counties, Texas

REQUEST FOR PROPOSALS NO. 23-SLB-1-LP

Class 926 / Item 25; Class 926 / Item 90; Class 926 / Item 91;

Class 925 / Item 15; Class 925 / Item 43; Class 925 / Item 45;

Class 925 / Item 46; Class 493 / Item 42

Release Date: March 9, 2023 Deadline for Submission: June 12, 2023 at 2:00 p.m. CT

Solicitation Point of Contact: Linh Phan, CTCD, CTCM

Linh.Phan@GLO.Texas.Gov

Any Addenda to this Solicitation will be posted to the Electronic State Business Daily (ESBD) website, http://www.txsmartbuy.com/esbd, under Agency Code 305 (General Land Office) and notification of such Addenda sent to all bidders in the relevant categories and regions listed on the Comptroller’s Centralized Master Bidders List (CMBL) at the time of the Solicitation. Each Respondent must check the website, or the means of communication established in its CMBL registration (if applicable) for any Addenda to this Solicitation. Failure to check for Addenda does not release any Respondent from its responsibility for complying with additional requirements or providing additional information listed in any Addenda.

mailto:Linh.Phan@GLO.Texas.Gov http://www.txsmartbuy.com/esbd

Texas General Land Office and School Land Board -ii- RFP No. 23-SLB-1-LP

TABLE OF CONTENTS

ARTICLE I. EXECUTIVE SUMMARY, DEFINITIONS, AND AUTHORITY

1.1 EXECUTIVE SUMMARY

1.2 DEFINITIONS

1.3 AUTHORITY

ARTICLE II. NATURE OF WORK

2.1 PROJECT BACKGROUND

2.2 LEASE AND TERM

ARTICLE III. ADMINISTRATIVE INFORMATION

3.1 SCHEDULE OF EVENTS

3.2 INQUIRIES

3.2.1 Contact

3.2.2 Clarifications

3.2.3 Responses

3.2.4 Prohibited Communications

3.3 SOLICITATION RESPONSE COMPOSITION

3.3.1 General Requirements

3.3.2 Solicitation Response Format

3.3.3 Page Limit and Supporting Documentation

3.4 SOLICITATION RESPONSE SUBMISSION AND DELIVERY

3.4.1 Deadline

3.4.2 Labeling

3.4.3 Delivery

3.4.4 Alterations, Modifications, and Withdrawals

ARTICLE IV. SOLICITATION RESPONSE EVALUATION & AWARD PROCESS

4.1 EVALUATION CRITERIA

4.1.1 Conformance with State Law

4.1.2 Minimum Qualifications

4.1.3 Selection Criteria

4.1.4 Detailed Scoring Methodology

4.2 SHORT LIST

4.3 DEMONSTRATION / PRESENTATIONS

4.4 BEST AND FINAL OFFER (BAFO)

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4.5 LEASE AWARD

ARTICLE V. REQUIRED RESPONDENT INFORMATION

5.1 RESPONDENT INFORMATION

5.1.1 Company Narrative

5.1.2 Company Profile

5.1.3 Key Staffing Profile

5.2 TECHNICAL PROPOSAL

5.3 PAST PROJECTS

5.4 MAJOR SUBCONTRACTOR INFORMATION

5.5 LITIGATION HISTORY

5.6 CONFLICTS

5.7 FINANCIAL REPORT

ARTICLE VI. RENT AND ROYALTY PROPOSAL

6.1 RENT AND ROYALTY PROPOSAL

ARTICLE VII. TERMS AND CONDITIONS

7.1 GENERAL CONDITIONS

7.1.1 Amendment

7.1.2 Informalities

7.1.3 Rejection

7.1.4 Irregularities

7.1.5 Negotiation Period

7.1.6 Open Records

7.1.7 Lease Responsibility

7.1.8 Public Disclosure

7.1.9 Remedies

7.2 INSURANCE

7.2.1 Required Insurance Coverages

7.2.2 Alternative Insurability

7.2.3 Bonds

7.3 LEASE TERMS AND SOLICITATION ACCEPTANCE

7.3.1 Terms and Conditions

7.3.2 Affirmations and Solicitation Acceptance

ARTICLE VIII. SUBMISSION CHECKLIST

EXHIBIT A. AFFIRMATIONS AND SOLICITATION ACCEPTANCE ....................................... A-1

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EXHIBIT B. SAMPLE LEASE ............................................................................................................. B-1

EXHIBIT C. NUECES, ARANSAS, AND KLEBERG COUNTIES 2023 CARBON

SEQUESTRATION LEASE MAPS ...................................................................................................... C-1

Texas General Land Office and School Land Board -1- RFP No. 23-SLB-1-LP

ARTICLE I. EXECUTIVE SUMMARY, DEFINITIONS, AND AUTHORITY

1.1 EXECUTIVE SUMMARY

Pursuant to Texas Health and Safety Code, Sec. 382.501 et seq., and to Texas Natural Resources Code, Ch. 51, the Texas General Land Office (“GLO”), acting through the Texas Land Commissioner on behalf of the School Land Board (“SLB”), is requesting proposals for the lease of Permanent School Fund (“PSF”) land in seven (7) defined Lease Tracts within Nueces, Aransas, and Kleberg Counties, Texas area for the establishment and operation of one or more geologic carbon dioxide storage repository(ies) under submerged land in a Miocene and/or Oligocene formation, including construction of necessary transportation and storage infrastructure (with each such repository referred to as a “Project”). The Texas Land Commissioner sits as ex officio Chairman of the SLB, and the staff of the GLO acts as the staff of the SLB. The GLO seeks one or more experienced and adequately funded entities to undertake one or more Projects in order to maximize the value of PSF land. Respondents must execute Exhibit A, Affirmations and Solicitation Acceptance, and complete other items listed on the submission checklist to be considered.

Additional information on the GLO/SLB and its programs can be found at http://www.glo.texas.gov.

The GLO will review Solicitation Responses and make recommendations to the SLB. The SLB may then award one or more Leases to one or more Respondents for one or more Project facilities. The GLO anticipates that a period of negotiation with the successful Respondent(s), including with regard to rent proposals, storage proposals, metering, reporting, and other relevant matters, will be necessary to reach a Lease agreement that is in the best interests of the PSF.

A Respondent might consider whether the nearby Port of Corpus Christi (www.portofcc.com) and its facilities and real estate assets would be useful in connection with the design and/or operation of the proposed Project(s).

1.2 DEFINITIONS

“Addendum” means a written clarification or revision to the Request for Proposals issued by the GLO. Respondents must acknowledge receipt of any Addenda in the submission of the Solicitation Response.

“Affiliate” means any individual or entity that, directly or indirectly, controls, is controlled by, or is under common control with, Respondent. “Control” means the ability to directly or indirectly direct the management and policies of an entity, whether through the ownership of voting securities or membership interests, by contract, or otherwise.

“BAFO” means Best and Final Offer.

“BEG” means the Bureau of Economic Geology at the University of Texas at Austin.

http://www.glo.texas.gov/ http://www.portofcc.com/

Texas General Land Office and School Land Board -2- RFP No. 23-SLB-1-LP

“CO2” means carbon dioxide, both anthropogenic and non-anthropogenic.

“ESBD” means the Electronic State Business Daily, http://www.txsmartbuy.com/esbd.

“GLO” means the Texas General Land Office.

“Lease” means a negotiated, signed document that contains the Terms and Conditions of the agreement between the GLO and a selected Respondent for the establishment and operation of a geologic carbon dioxide storage repository on PSF lands.

“Leased Acreage” means the available tract or tracts of submerged PSF acreage, as those tracts are shown and labeled on the attached Exhibit C, which Respondent proposes to lease pursuant to this Solicitation.

“Lessee” means, collectively, one or more Respondents that are chosen by the SLB after review of Solicitation Responses to undertake the Project, including by signing the Lease with the State, the form of which is attached to this Solicitation as Exhibit B.

“PIA” means the Public Information Act, Chapter 552 of the Texas Government Code.

“Project” means the construction and operation of facilities for the transportation and safe, long-term geologic storage of CO2 as described in this Solicitation.

“PSF” means Permanent School Fund.

“Respondent” means the entity responding to this Solicitation.

“SLB” means School Land Board.

“Solicitation” means this Request for Proposals.

“Solicitation Response” means the Respondent’s entire response to this Solicitation, including all documents requested in this Solicitation.

“State” means the State of Texas and any state agency; the GLO or state agency identified in this Solicitation, its officers, employees, or authorized agents.

“TAC” means Texas Administrative Code.

1.3 AUTHORITY

The GLO/SLB is soliciting the proposals described herein under Texas Health and Safety Code, Ch. 382, Subchapter K, and Texas Natural Resources Code, Ch. 51.

Texas General Land Office and School Land Board -3- RFP No. 23-SLB-1-LP

ARTICLE II. NATURE OF WORK

2.1 PROJECT BACKGROUND

The Lease that a Lessee obtains through this Solicitation process will authorize Lessee to use the Leased Acreage as necessary for transportation and safe, long-term geologic storage of CO2 as described in this Solicitation. Lessee will be responsible for providing and maintaining, as necessary, all labor, materials, tools, equipment, technology, permits, supplies, superintendence, insurance, incidentals, and services necessary for the construction and operation of the contemplated CO2 storage repository. The GLO anticipates that the work for each Project will include, and in some instances the Lease that the Lessee signs will require, at least the following tasks:

1) Characterize the geologic and geophysical features of BEG-identified and SLB-authorized storage formations (see BEG report entitled “Gulf of Mexico Miocene CO2 Site Characterization Mega Transect”).

2) Select CO2 injection site(s) based on geological suitability, long-term well integrity risk, and repository economic viability.

3) Transport CO2 from its source(s) to the storage location(s).

4) Obtain and comply with necessary permitting requirements, including but not limited to successful acquisition of Class VI Underground Injection Control permit(s) and compliance with all other applicable federal, state, and local laws and regulations (including but not limited to relevant rules of the GLO, the Texas Railroad Commission, the Texas Commission on Environmental Quality, the Texas Department of Parks and Wildlife, the U.S. Occupational Safety and Health Administration, and the U.S. Environmental Protection Agency regarding Class VI wells, and carbon dioxide handling, transport, storage, and monitoring).

5) Construct and operate the Project, including, without limitation, one or more bespoke injection wells drilled for purposes of the Project. (On prior written request by Lessee, the GLO may, in its sole discretion, consent to the responsible re-use of an existing wellbore in connection with a Project, including, e.g., for use as a monitoring well.)

6) Develop an operational plan, including financial assurance, decommissioning of all topside structures and adequate well plugging and abandonment and contingency plans to address potential CO2 leakage events and well integrity failures.

7) Compensate the PSF for use of the offshore repository and any associated easements, and storage of CO2.

8) Identify environmental concerns and develop a plan to address those concerns.

https://repositories.lib.utexas.edu/handle/2152/72383

Texas General Land Office and School Land Board -4- RFP No. 23-SLB-1-LP

9) Monitor CO2 sequestration and report repository technical and economic performance to GLO.

10) Develop and adopt a repository closure contingency plan, including verification of necessary bond payment for well abandonment.

The selected Respondent(s), after selection, shall be bound to specific terms and conditions to be negotiated with the GLO within the framework of the Lease form attached to this Solicitation as Exhibit B.

2.2 LEASE AND TERM

Respondent shall identify which tract or tracts, as identified on Exhibit C, Respondent proposes to lease as the Leased Acreage. For further information regarding the location of the potential Leased Acreage, see the shapefile posted to the ESBD, which can be opened and viewed within a geographic information system.

Any Lease resulting from this Solicitation shall identify the Leased Acreage and shall be effective as of the date it is signed by both parties (the “Effective Date”), and shall remain in effect for a maximum 2-year period for Lessee to conduct its due diligence and to appraise the feasibility of the Project (the “Development” period), followed by a maximum 3-year period for Lessee to construct the Project (the “Construction” period), followed by a period for Lessee to operate the Project as a sequestration facility (the “Operational” period), with the combined Development, Construction, and Operational periods resulting in an overall maximum lease term of 30 years, subject to possible extension as agreed to in writing by the parties, and subject to the conditions set forth herein and in the Lease.

Notwithstanding the foregoing, the Parties may agree in writing to extend any or all of the Development, Construction, and Operational periods beyond the lengths specified herein.

If Lessee’s proposed route(s) for infrastructure (including pipelines) to transport CO2 to the injection site runs across, under, or through land belonging to the PSF, Lessee will obtain necessary easement(s) from the GLO for such infrastructure. Lessee must meet all Project development progress milestones set out in the Lease. Failure to meet milestones may lead to termination of the Lease. The parties may, upon mutual written agreement, renew the Lease unless terminated early under the terms and conditions of the Lease.

The GLO currently intends that, pursuant to any Lease resulting from this Solicitation, the Lessee thereunder may, at any time during the Operational period, relinquish up to 50% of the original leased acreage. Any relinquished acreage area must be described within the constraints of the established Texas Offshore State Tract Number system or any other description acceptable to Lessor, and the leased acreage that has been relinquished must have a minimum width of 5 miles in any horizontal azimuth.

Texas General Land Office and School Land Board -5- RFP No. 23-SLB-1-LP

ARTICLE III. ADMINISTRATIVE INFORMATION

3.1 SCHEDULE OF EVENTS

EVENT DATE/TIME

Issue Solicitation

March 9, 2023

Deadline for Submitting Questions May 15, 2023 at 5:00 p.m. CT

Anticipated Release Date of Answers to Questions

May 19, 2023

Deadline for Submission of Solicitation Responses June 12, 2023 at 2:00 p.m. CT

Evaluation Period June 13, 2023 to July 11, 2023

Lessee Selection and Notice of Award

August 2, 2023

Lease Award, Negotiation and Execution August 3, 2023 to September 1, 2023

Deadline for Bonds and Insurance Upon Execution of Lease

NOTE: These dates represent a tentative schedule of events. The GLO reserves the right to modify these dates at any time prior to the deadline for submission of Solicitation Responses upon notice posted on the Electronic State Business Daily (ESBD) website at:

http://www.txsmartbuy.com/esbd. Please search under Agency Code 305 (General Land Office and Veterans Land Board). Any modification of dates after the deadline for submission of Solicitation Responses will not be posted.

3.2 INQUIRIES

3.2.1 Contact

All requests, questions, or other communications about this Solicitation must be made in writing to the GLO’s Purchasing Department, addressed to the person listed below.

Texas General Land Office and School Land Board -6- RFP No. 23-SLB-1-LP

Name: Linh Phan, CTCD, CTCM Address: 1700 N. Congress Ave., Austin, Texas 78701 Phone: 800.998.4456 or 512.463.5098 Email: Linh.Phan@glo.texas.gov

If you receive an “out of office” reply from the point-of-contact listed above, please forward your e-mail to the secondary point-of-contact listed below.

Name: Sarah Bergmann, CTCM, CTCD Address: 1700 N. Congress Ave., Austin, Texas 78701 Phone: 800.998.4456 or 512.475.5147 Email: Sarah.Bergmann@glo.texas.gov

3.2.2 Clarifications

The GLO will allow written requests for clarification of this Solicitation. Questions may be e-mailed to the point-of-contact listed in Section 3.2.1 above. Respondents’ names shall be removed from questions in the responses released. Questions shall be submitted in the following format. Submissions that deviate from this format may not be accepted:

a. Identifying Solicitation number on email subject

b. Section number

c. Text of passage being questioned

d. Question

NOTE: The deadline for submitting questions is noted in Section 3.1 above.

Please provide your company name, address, phone number, e-mail address, and name of contact person when submitting questions.

3.2.3 Responses

All accepted questions will result in written responses with copies posted to the ESBD at: http://www.txsmartbuy.com/esbd. Responses shall be posted as an Addendum to the Solicitation. It is Respondent’s responsibility to check the ESBD for updated responses.

3.2.4 Prohibited Communications

On issuance of this Solicitation, except for the written inquiries described in Section

3.2.1 above, the SLB and the GLO will not answer questions or otherwise discuss the contents of this Solicitation with any potential Respondent or their representative(s). Attempts to ask questions by phone or in person will not be allowed or recognized as valid. Failure to observe this restriction may disqualify the Respondent. Respondent shall rely only on written statements issued through or mailto:Linh.Phan@glo.texas.gov mailto:Sarah.Bergmann@glo.texas.gov http://www.txsmartbuy.com/sp

Texas General Land Office and School Land Board -7- RFP No. 23-SLB-1-LP by the GLO’s purchasing staff. This restriction does not preclude discussions between affected parties for the purposes of conducting business unrelated to this Solicitation.

3.3 SOLICITATION RESPONSE COMPOSITION

3.3.1 General Requirements

Respondent shall complete and upload the documents listed below to the Box™ URL in Section 3.4.3:

a) One Proposal, including all documents requested in Part 1 of the Submission

Checklist, submitted as one Portable Document Format (.pdf) file; and

b) One Financial Report (see Section 5.7) submitted as one .pdf file.

Respondent shall prepare a clear and concise Solicitation Response that focuses on the instructions and requirements of the Solicitation. Respondent is responsible for all costs related to the preparation of their Solicitation Response.

Any terms and conditions attached to a Solicitation Response that are intended to change the terms of the Lease will not be considered and may result in disqualification.

3.3.2 Solicitation Response Format

For ease of evaluation, the Solicitation Response shall be presented in a format that corresponds to the order requested in Article VIII, Submission Checklist. Responses to each section and subsection shall be labeled clearly to indicate the item being addressed. Exceptions to this will be considered during the evaluation process.

3.3.3 Page Limit and Supporting Documentation

Solicitation Responses shall not exceed 60 pages in length. Exhibit A, signed acknowledgments of Addenda, past projects, résumés, Financial Report (if relevant), are considered supporting documentation and are not included in the page limit. The Solicitation Response should be formatted using 12-point or larger font, except for charts, graphs, or other graphical representations of data.

3.4 SOLICITATION RESPONSE SUBMISSION AND DELIVERY

3.4.1 Deadline

Solicitation Responses must be received at the Box™ URL in Section 3.4.3 no later than as specified in Section 3.1. Respondents may submit their Solicitation

Texas General Land Office and School Land Board -8- RFP No. 23-SLB-1-LP

Responses any time prior to that deadline. Box™ shall time stamp all uploaded Solicitation Responses; any other documentation of timely submission in lieu of the Box™ time stamp WILL NOT be accepted.

3.4.2 Labeling

Each file uploaded to Box™ shall include Respondent’s company name and the title of the document; for example: “Company X: Proposal.”

3.4.3 Delivery

Respondents must upload Solicitation Responses using the following Box™ link:

Upload Solicitation Responses to Box or https://txglo.app.box.com/f/0b5787c6ce6e4dd89cdb0c11a2f61cbe

The GLO/SLB shall not accept Solicitation Responses submitted by any other means. Please contact the point-of-contact listed in section 3.2.1 above for assistance with Box™.

3.4.4 Alterations, Modifications, and Withdrawals

Solicitation Responses may be modified, altered, or withdrawn by notifying the point-of-contact listed in Section 3.2.1 above, provided such notice is received prior to the deadline for submission of Solicitation Responses.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

https://txglo.app.box.com/f/0b5787c6ce6e4dd89cdb0c11a2f61cbe https://txglo.app.box.com/f/0b5787c6ce6e4dd89cdb0c11a2f61cbe

Texas General Land Office and School Land Board -9- RFP No. 23-SLB-1-LP

ARTICLE IV. SOLICITATION RESPONSE EVALUATION & AWARD PROCESS

4.1 EVALUATION CRITERIA

4.1.1 Conformance with State Law

Solicitation Responses shall be evaluated in accordance with applicable State law.

The GLO/SLB shall not be obligated to accept the highest royalty or rent proposal but shall award Leases that provide the best value to the State of Texas.

4.1.2 Minimum Qualifications

Respondents must meet the minimum qualifications listed below. Furthermore, Solicitation Responses that appear unrealistic in terms of technical commitment, that show a lack of technical competence, or that indicate a failure to comprehend the risk and complexity of a potential Lease may be rejected.

Respondent shall submit a summary (not to exceed two pages) that provides specific support for meeting the minimum qualifications outlined in this Section.

This support can specifically state how the Respondent meets each minimum qualification or can direct the evaluators to the appropriate section of the Solicitation Response that provides support for the Respondent satisfying each minimum qualification.

4.1.2.1 Respondent must have demonstrated experience undertaking and completing large-scale projects involving infrastructure construction and/or industrial-scale facility operation, preferably involving CO2, gas storage, and/or hydrocarbon pipelines;

4.1.2.2 Respondent must have demonstrated experience obtaining and complying with Federal or State permits, preferably involving either or both of oil and gas regulations or environmental regulations; and

4.1.2.3 Respondent must be financially solvent and adequately capitalized.

4.1.3 Selection Criteria

Solicitation Responses shall be consistently evaluated and scored in accordance with the following criteria:

4.1.3.1 Demonstration of Respondent’s geotechnical understanding of the relevant, available, public and private geotechnical data (e.g. 3D seismic, wells, remote sensing etc.) together with an evaluation of the subsurface within the area of the subject Lease, captured in high quality geotechnical models for the target reservoir(s) capable of

Texas General Land Office and School Land Board -10- RFP No. 23-SLB-1-LP predicting the storage capacity and the injectivity potential of the Leased acreage together with the predicted distribution of CO2 in the Leased acreage reservoir(s) following the Operational period.

(25%)

4.1.3.2 Proposed source(s) and quantities of CO2 to be stored, and proposed schedule and rate of payments to be made to the GLO, for the benefit of the PSF, for lease of land and storage of CO2. The proposed financial elements of Lease Signature Payment (as defined in Section 6.1, below), annual acreage rental fee, and per tonne CO2 injection fee are expected to be at or above recent published Gulf Coast market transactions and with the injection fee tied to current 45Q pricing mechanisms or any equivalent future carbon pricing mechanisms applicable to the Texas Gulf Coast market. (25%)

4.1.3.3 Financial capacity and operational capability to execute the proposed sequestration project. (10%)

4.1.3.4 Proposed work plan for the Development and Construction periods of the Project, to include e.g. subsurface data gathering, improved seismic imaging, injectivity testing, and surface infrastructure identification and build out. (10%)

4.1.3.5 Proposed CO2 storage plan for the Operational period, with activity schedule and a description of metering and performance communication for GLO. (10%)

4.1.3.6 Risk and hazard assessment for all phases of the project -

Development, Construction, Operational, decommissioning and monitoring, including a plan for remediation or mitigation of any potential loss of CO2 containment from the storage repository.

(10%)

4.1.3.7 Proposed plan for permitting and for compliance with all applicable

Federal and State regulations. (10%)

NOTE: To clarify any response, the Solicitation evaluation committee may contact references provided in response to this Solicitation, contact Respondent’s clients, or solicit information from any available source concerning any aspect of the Solicitation deemed pertinent to the evaluation process.

4.1.4 Detailed Scoring Methodology

The GLO assembles an evaluation committee to evaluate each responsive Solicitation Response. Each evaluator completes one evaluation worksheet for each

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Solicitation Response. The evaluator evaluates each Solicitation Response individually against the requirements of this Solicitation, and not against other responses. The evaluator assigns the number of points he or she believes each Solicitation Response merits out of the possible points indicated on the evaluation worksheet for each selection criterion.

Technical evaluation and Project operational plans are scored based on a reasonableness assessment of the Solicitation Response, considering various factors such as, without limitation: Respondent’s subsurface geotechnical evaluation; industry best practices for US Gulf Coast midstream (pipelines, facilities) and upstream (seismic, drilling) activities; the appropriateness of the cost assumptions chosen by the Respondent; and all proposed activity being fully compliant with all applicable State and Federal health, safety and environmental regulations and guidelines.

Each evaluator scores Solicitation Responses independently and impartially. Scores are not divulged between evaluation committee members until after they have been finalized, submitted, and compiled by the GLO representative. Evaluators may ask questions of the GLO representative, agency legal counsel, and designated technical experts if they are unable to find information, do not understand information in a response, or require technical assistance.

The GLO representative averages all evaluators’ total scores for each Solicitation Response to determine Solicitation Response rankings.

4.2 SHORT LIST

The GLO expects to make an initial evaluation of the Solicitation Responses to develop a short list of finalists. However, the GLO is not obligated to develop this list. If a list is developed, all Respondents will be notified in writing whether or not they are finalists.

4.3 DEMONSTRATION / PRESENTATIONS

The GLO may invite short listed finalists to provide demo presentations. Presentations may be conducted in person or online via a virtual platform mutually agreed upon by the GLO and Respondent upon Respondent’s acceptance of the invitation.

Respondents will be provided with notice of any such presentations and are responsible for their own presentation equipment and internet connection. Failure to participate in the requested presentation may eliminate a Respondent from further consideration. The GLO is not responsible for any costs incurred by the Respondent associated with the presentation.

4.4 BEST AND FINAL OFFER (BAFO)

Clarification discussions, at the GLO’s sole option, may be conducted with Respondents who submit Solicitation Responses determined to be acceptable and competitive.

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Respondents shall be accorded fair and equal treatment with respect to any opportunity for discussion and/or written revisions of the Solicitation Responses. Such revisions may be permitted after submissions and prior to award solely for the purpose of obtaining BAFOs.

In conducting discussions, the GLO shall not disclose any information derived from the Solicitation Responses submitted by competing Respondents.

The GLO evaluation committee shall score BAFO responses in a manner consistent with the scoring of original Solicitation Responses. The criteria to be re-evaluated following a BAFO shall depend on the type of clarification requested by the GLO from Respondent.

Scores for any of the applicable selection criteria included in the GLO’s request for BAFO shall be replaced by the BAFO scores.

4.5 LEASE AWARD

The GLO/SLB may award a Lease to one or more Respondents under this Solicitation. Any award is contingent upon the successful negotiation of final Lease terms with the GLO and upon approval of the SLB. Negotiations shall be confidential and not subject to disclosure to competing Respondents unless and until an agreement is reached. If Lease negotiations cannot be concluded successfully, the GLO may negotiate a Lease with fewer than all of the initially chosen Respondents, may negotiate a Lease with the next highest scoring Respondent(s), or may withdraw this Solicitation.

NOTE: Solicitation Responses are subject to the Texas Public Information Act, Chapter 552 of the Texas Government Code, and will be withheld from or released to the public only in accordance therewith.

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ARTICLE V. REQUIRED RESPONDENT INFORMATION

5.1 RESPONDENT INFORMATION

Each Respondent must provide satisfactory evidence of its experience and operational and financial ability to undertake and complete the types of activities described in this Solicitation, including to complete and operate the Project.

5.1.1 Company Narrative

Provide a detailed narrative explaining why Respondent is qualified to undertake the Project, focusing on Respondent’s key strengths and competitive advantages.

5.1.2 Company Profile

Provide a company profile to include:

a. The company ownership structure (e.g., corporation, partnership, LLC, sole proprietorship, etc.), including any wholly owned subsidiaries, affiliated companies, or joint ventures. (Please provide this information in a narrative and as a graphical representation). If Respondent is an Affiliate of, or has a joint venture or strategic alliance with, another company, please identify the percentage of ownership and the percentage of the parent’s ownership.

Finally, please provide your proposed operating structure for the Project and which entities (e.g., parent company, Affiliate, joint venture, subcontractor, etc.) will be performing Project tasks;

b. The year the company was founded and/or legally organized. If organized as a business entity other than a sole proprietorship (e.g., corporation, LLC, LLP, etc.), please indicate the type of entity, the state under the laws of which the company is organized and the date of organization;

b. The location of Respondent’s headquarters and any field office(s) that may provide services in connection with the Project;

c. The name, title, mailing address, e-mail address, telephone number of Respondent’s point of contact for any resulting Lease under this Solicitation;

d. Indicate whether your company has ever been engaged under a contract by any Texas state agency. If “Yes,” specify when, for what duties, and for which agency; and

f. The company’s SAM unique entity ID registration number.

NOTE: A Respondent that is not organized under the laws of the state of Texas must register with the Texas Secretary of State before it may transact business

Texas General Land Office and School Land Board -14- RFP No. 23-SLB-1-LP in Texas. Respondent must provide proof of registration before the GLO/SLB may award a lease under this Solicitation.

5.1.3 Key Staffing Profile

Respondent must provide a key staffing profile and résumés for staff that will be responsible for the Project and performance of Lease obligations.

“Key staff” is defined as experienced, professional and/or technical personnel who will have major responsibilities under a lease and/or provide unusual or unique expertise essential for successful completion of the work performed. If key staff become unavailable for work, Provider shall promptly notify the GLO and assign alternative staff of equal ability and qualifications. The GLO reserves the right to approve changes to key staff.

Staff members listed in the Key Staffing Profile who are independent contractors, and not employees, of Respondent may also qualify as subcontractors. Please evaluate your Key Staffing Profile accordingly.

5.2 TECHNICAL PROPOSAL

Respondent must submit a Technical Proposal describing the proposed Project. The Technical Proposal must describe clearly, specifically, and as completely as possible, Respondent’s subsurface understanding of the proposed Leased Acreage, firstly through the geotechnical database (3D seismic, wells, remote sensing etc.) used both “regionally’ in the areas surrounding the proposed Leased acreage to produce e.g. relevant regional reservoir presence and reservoir pressure maps and within the area of the proposed Leased Acreage to generate high quality subsurface geotechnical models for the reservoir(s) into which Respondent proposes to inject CO2 (the “Target Reservoir(s)”). The subsurface models should be capable of predicting the storage capacity and the injectivity potential of the Leased Acreage together with the predicted distribution of CO2 in the Target Reservoir(s) following the proposed injection period. The subsurface models should also identify distinct subsurface compartments or zones that are hydraulically isolated such that injection into each could eliminate or limit interference with current or future CO2 injection programs in adjacent Leased acreage. The Technical evaluation should also identify key risks and uncertainties within the models generated.

As a guide, submissions could include the following technical information regarding the capacity, injectivity and containment assessment of the proposed Leased Acreage:

• Location map, identifying all well and seismic data used in the evaluation

• Identification of Target Reservoir(s) and sealing unit(s) in the Leased Acreage

• Target Reservoir(s) facies map(s)

• Target Reservoir(s) quality map(s)

• Target Reservoir(s) depth structure map(s), including key faults and other possible sealing boundaries (e.g. salt features, stratigraphic discontinuity)

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• Target Reservoir(s) thickness (isochore) map(s)

• Target Reservoir(s) pressure map(s)

• Target Reservoir(s) containment map showing stratigraphic seal presence and thickness and identifying possible leak hazards and risks (e.g. faults, legacy oil/gas wells)

• Calculated CO2 density map for estimated pressure and temperature conditions in the Target Reservoir

• CO2 injectivity assessment

• CO2 injection capacity assessment for the Leased Acreage

• Injection plan for the Leased Acreage, showing potential injection and monitoring well positions and expected injection rates

• Reservoir simulation model(s) predicting distribution of CO2 following the injection (Operations) period

The Technical Proposal must contain a proposed work plan for the Development and Construction periods of the Project, to include e.g., subsurface data gathering, improved seismic imaging, injectivity testing, surface infrastructure identification and build out, and a description of key well and seismic activities, their timing, and technical objectives.

The Technical Proposal must contain the proposed methodology and schedule of the Project with regard to transportation of CO2 to the repository. The Technical Proposal could include the following technical information regarding the transportation of CO2 to the repository:

• Identification of any existing legacy infrastructure (pipelines, offshore platforms) that could be utilized in the injection Operations period in the Leased Acreage.

• Current infrastructure plan for the Construction Operations periods, including projected new-build pipelines and platforms and any new right-of-way permits that would be required for construction.

The Technical Proposal must contain a proposed storage plan that includes a description of the planning and measures that will be undertaken for the secure long-term storage of CO2 in the repository. The Technical Proposal could include the following technical information regarding the secure long-term storage of CO2 in the repository:

• Identification of the MRV (monitoring, reporting, and verification) plan for the lease including e.g. monitoring wells, 4D seismic

• Contingency plans for any escape of injected CO2 from primary containment

The Technical Proposal should identify and summarize the key risks and hazards in the various stages of the execution of the project together with mitigation options. The Technical Proposal should also demonstrate an understanding of and intended compliance with the applicable Federal and State regulations.

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5.3 PAST PROJECTS

Respondent must identify and describe a minimum of three non-GLO completed projects of similar general scope performed within the last five years, preferably for state and/or local government entities. Information provided shall include:

a) Client name;

b) Project description;

c) Total dollar amount of project; including the funding sources (e.g., federal agency or program, federal grant, state funding) for each past project if that information is available;

d) Total duration;

e) Key staff assigned to the referenced project that will be designated for work under this Solicitation; and

f) Client project manager name, telephone number, and e-mail address.

5.4 MAJOR SUBCONTRACTOR INFORMATION

In addition to the requirements of Article II, Respondent must identify any major subcontractors whom Respondent intends to utilize in performing 15% or more of the activity that constitutes the Project. Respondent must indicate whether or not Respondent holds any financial interest in any major subcontractor. It may be required as a condition of award that an authorized officer or agent of each proposed major subcontractor sign a statement to the effect that the subcontractor has read, and will agree to abide by, Respondent’s obligations under any lease awarded pursuant to this Solicitation.

If a major subcontractor will not be utilized for this Project, indicate in the appropriate section of the Solicitation Response.

5.5 LITIGATION HISTORY

Respondent must include in its Solicitation Response a complete disclosure of any actual or alleged breaches of contract it has engaged in. In addition, Respondent must disclose any civil or criminal litigation or investigation pending at any time during the last three years that involves Respondent’s work on or involvement with a construction, pipeline, industrial, or other type of project generally similar to the Project, as well as any in which Respondent has been judged guilty or liable. For each instance of litigation or investigation, Respondent shall list: basic case information (e.g., cause number/case number, venue information, names of parties, name of investigating entity); a description of claims alleged by or against Respondent or its parent, subsidiary, or other affiliate; for each resolved case, a description of the disposition of Respondent’s involvement (e.g., settled, dismissed, judgment entered, etc.).

Failure to comply with the terms of this provision may disqualify any Respondent.

Solicitation Responses may be rejected based upon Respondent’s prior history with the state of Texas or with any other party that demonstrates, without limitation, unsatisfactory

Texas General Land Office and School Land Board -17- RFP No. 23-SLB-1-LP performance, adversarial or contentious demeanor, or significant failure(s) to meet contractual obligations.

If Respondent has no litigation history, as described above, so indicate in the appropriate section of the Solicitation Response.

5.6 CONFLICTS

Respondent must disclose any potential conflict of interest it may have with the GLO or the SLB in undertaking the Project, including all existing or prior arrangements. Please include any activities of affiliated or parent organizations and individuals who may be assigned to manage this account. If the Respondent has no conflicts, as described above, so indicate in the appropriate section of the Solicitation Response.

5.7 FINANCIAL REPORT

If Respondent is an entity that is required to prepare audited financial statements, Respondent shall submit a financial report that includes:

a. Last three years of audited accrual-basis financial statements, including an income statement, cash flow statement, and balance sheet;

b. If applicable, last three years of consolidated statements for any holding companies or affiliates;

c. An audited or un-audited accrual-basis financial statement of the most recent quarter of operation; and

d. A full disclosure of any events, liabilities, or contingent liabilities that could affect

Respondent’s financial ability to perform this Project.

If Respondent is a privately-owned entity or sole proprietorship for which audited financial statements are not required, Respondent shall submit a report that includes:

a. Last three years of un-audited accrual-basis financial statements, including an income statement, cash flow statement, and balance sheet;

b. An audited or un-audited accrual-basis financial statement of the most recent quarter of operation; and

c. A full disclosure of any events, liabilities, or contingent liabilities that could affect

Respondent’s financial ability to perform this Project;

OR

d. Other financial information sufficient for the GLO, in its sole judgement, to determine if Respondent is financially solvent and adequately capitalized.

As part of the Financial Analysis process, the GLO may request additional or clarifying information from any Respondent after the Solicitation Response submission deadline. The GLO may disqualify any Respondent that fails to provide the requested information within the time period specified in the request, regardless of whether the Respondent mistakenly

Texas General Land Office and School Land Board -18- RFP No. 23-SLB-1-LP provided inaccurate contact information in its Solicitation Response or failed to check for GLO communication attempts.

The GLO may also refer to any relevant published, public financial information (e.g. SEC 10K reporting, official company-issued investor reports) in forming an assessment of the Respondent’s financial readiness to undertake the work program necessary to appraise, develop/construct and operate any potential repository identified in the Lease area.

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ARTICLE VI. RENT AND ROYALTY PROPOSAL

6.1 RENT AND ROYALTY PROPOSAL

Respondent must provide a proposal for paying to the GLO, for the benefit of the PSF, each of the following elements: (i) A single payment, due at the time of Lease execution, for the right to use PSF-owned submerged strata in the Leased Acreage for CO2 storage – the “Signature Payment” based on a minimum of $50/acre for the subject lease acreage; (ii) An annual acreage rental fee of a minimum of $50/acre (the “Annual Acreage Rental Fee”) for the subject Leased Acreage for the duration of the Development and Construction periods and applicable to all active (non-relinquished) Leased Acreage during the Operational period (to be prorated for any Leased Acreage relinquished during the 12 months before the rental is due); and (iii) An injection fee payment of a minimum of $4/tonne CO2 for the mass of CO2 as it is placed into storage (but not again while it remains in storage), without regard to loss or leakage and where the future injection fee is linked to any future increases in the value of the 45Q tax credit (the “Injection Fee”); (iv) a portion of any additional (i.e., non 45Q) value, however monetized, of CO2 capture and/or storage tax credits earned by, or paid to, Respondent in connection with the Project.

Per Section 4.1.3.2 of this Solicitation, Respondent’s proposed source(s) and quantities of CO2 to be stored, and the rent resulting from the proposed quantities, are a material element in the selection of the Respondent(s) who will enter into Leases with the GLO/SLB. For that reason, the Lease must include a baseline minimum annual revenue target to be met during each year in the Operational period, based on the applicable Injection Fee and the proposed annual stored quantities as set out in Respondent’s Response. The Lease will allow the GLO to make a revenue forecast and to terminate the Lease if a minimum “Standard Annual Volume” in tonnes of injected CO2 is not maintained for a period of time as agreed to and stated in the Lease.

Respondents are hereby expressly put on notice that because of the nature of rent and royalty proposals that can be made, the ultimate rent and/or royalty provisions in the Lease will be subject to further negotiation and documentation following the award(s) under this Solicitation.

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ARTICLE VII. TERMS AND CONDITIONS

7.1 GENERAL CONDITIONS

7.1.1 Amendment

The GLO, on behalf of the SLB, reserves the right to alter, amend, or modify any provision of this Solicitation, or to withdraw this Solicitation, at any time prior to the award, if it is in the best interest of the SLB and/or the PSF.

7.1.2 Informalities

The GLO reserves the right to waive minor informalities and irregularities, as determined in the GLO’s sole discretion, in any Solicitation Response received.

7.1.3 Rejection

The GLO reserves the right to reject any or all Solicitation Responses received prior to lease award.

7.1.4 Irregularities

Any irregularities or lack of clarity in this Solicitation should be brought to the attention of the point-of-contact listed in Section 3.2.1 as soon as possible, so that corrective addenda may be furnished to prospective Respondents via the ESBD.

7.1.5 Negotiation Period

Solicitation Responses shall be binding for a period of 120 days after they are opened. Respondents may extend the time for which their Solicitation Response will be honored.

7.1.6 Open Records

The GLO and SLB are government agencies subject to the Texas Public Information Act (PIA), Chapter 552, Texas Government Code. The Solicitation Response and other information submitted to the GLO by the Respondent and any Lease(s) awarded pursuant to this Solicitation are subject to release as public information. The Solicitation Response and other submitted information shall be presumed to be subject to disclosure unless a specific exception to disclosure under the PIA applies. If it is necessary for the Respondent to include proprietary or otherwise confidential information in its Solicitation Response or other submitted information, the Respondent must clearly label that proprietary or confidential information and identify the specific exception to disclosure of that information in the PIA. Merely making a blanket claim that the entire Solicitation Response is protected from disclosure because it contains some proprietary information is not

Texas General Land Office and School Land Board -21- RFP No. 23-SLB-1-LP acceptable and shall make the entire Solicitation Response subject to release under the PIA. In order to trigger the process of seeking an Attorney General opinion on the release of proprietary or confidential information, the specific provisions of the Solicitation Response the Respondent considers proprietary or confidential must be clearly labeled as described above. Any information which is not clearly identified as proprietary or confidential shall be deemed to be subject to disclosure pursuant to the PIA, except as provided by law.

Respondents are required to make any information created or exchanged with the GLO or SLB pursuant to this solicitation and any Lease that may result from this solicitation, and not otherwise excepted from disclosure under the Texas Public Information Act, available in a format that is accessible by the public at no additional charge to the GLO or SLB.

Information related to the performance of a Lease awarded hereunder may be subject to the PIA and will be withheld from public disclosure or released only in accordance therewith. Respondent shall make any information created or exchanged with the GLO or the SLB, and not otherwise excepted from disclosure under the PIA, available in a format that is accessible by the public at no additional charge to the GLO. Respondent shall make any information required under the PIA available to the GLO in Portable Document Format (PDF) or any other format agreed between the parties. The original copy of each Solicitation Response shall be retained in the official files of the GLO as a public record.

Solicitation Responses and all other documents associated with this Solicitation will be withheld or released upon written request only in accordance with the PIA.

To the extent that a Respondent wishes to prevent the disclosure of portions of its Solicitation Response to the public, Respondent shall demonstrate the applicability of any exception to disclosure provided under the PIA in accordance with the procedures prescribed by the PIA. Respondent may clearly label individual documents “confidential” or “trade secret” to demonstrate that it believes certain information is excepted from disclosure and may legally be withheld from the public. Respondent thereby agrees to indemnify and defend the GLO for honoring such a designation. The failure of the Respondent to clearly label such documents shall constitute a complete waiver of any and all claims for damages caused by the GLO’s release of these records.

Pursuant to Texas Government Code Chapter 2261, any Lease or contract that results from this Solicitation, including selected Respondent’s Solicitation Response, shall be posted to the…