ESBD_File_318799_RFP 23-SLB-1-LP Addendum No. 3 Final.pdf

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

TEXAS GENERAL LAND OFFICE

AND

SCHOOL LAND BOARD

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

Addendum No. 3

Lease of Permanent School Fund Land for Storage of Carbon

Dioxide in Nueces, Aransas, and Kleberg Counties, Texas

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

Addendum No. 1 Issue Date: March 20, 2023

Addendum No. 2 Issue Date: April 11, 2023

Addendum No. 3 Issue Date: May 22, 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 ESBD 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 -2- RFP No. 23-SLB-1-LP Addendum No. 3

RFP 23-SLB-1-LP Questions and Answers

Question 1: Do these addendums apply to each RFP? Do the Q&A/new addendum for SLB-

2 will apply to SLB-1?

Answer 1: With exception to questions specific to one geographic location or the other, all solicitation questions and responses included in the addendums for RFP 23-SLB-1-LP and RFP

23-SLB-2-LP apply to the other solicitation.

Question 2: Question to clarify the formation limitations (if any) listed in Article I, III and

Exhibit C of the lease form.

• Article 1.01 of the Lease states the Lessor leases tracts for the exclusive right of geologically store anthropogenic CO2 in a reservoir(s) and pore space in the Miocene and/or Oligocene Formations (defined below) underlying the Leased Surface Tracts within subsurface stratigraphic intervals more fully described in Exhibit C.

• Article III provides the definitions for the Miocene Formation and the Oligocene

Formations in 3.02 (e) and (f). There are a number of blanks left to describe both formations.

• Lease Exhibit C states relevant Miocene and/or Oligocene formations and the well strata shows specifies portions of each formation.

Does Exhibit C of the Lease form limit our scope of both the Miocene and Oligocene

Formations where we can only consider the listed formations (lower Miocene and upper

Oligocene) or are we able to consider other parts of those formations such as the top and middle Miocene and the lower Oligocene?

Answer 2: Respondents may consider and submit proposals including all Miocene and Oligocene age Formations.

Question 3: 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.”

Is all ‘Respondent Information’ to be submitted per submission or per entity? (i.e., if two entities are submitting a proposal 50/50 will they each submit this information?)

Answer 3: Respondent Information is to be submitted per responding entity. While two or more responding entities in a single Solicitation Response might be considered, collectively, a single

“Respondent” for some purposes (e.g., for the amount of royalty that “Respondent” proposes to pay), the GLO must have the information to be able to assess the qualifications of each of those responding entities separately.

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

Question 4: 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.”

Are Past Projects to be submitted per submission or per entity (i.e., if two entities are submitting a proposal 50/50 will they each submit 3 past projects for a total of 6 or collectively submit 3 total)? Can a Past Project be performed by a Major Subcontractor? Is the ‘performed within the last five years’ term firm or preferred?

Answer 4: Each single Solicitation Response must describe a minimum of three projects. So, in the example, a minimum of three, not six, projects would need to be described. A relevant past project may have been performed by a “major subcontractor” provided the Respondent can demonstrate a major role in planning, operations management and a clear, single point of accountability for that project. Bear in mind, however, that Solicitation Responses will be reviewed, in part, in light of what will make the School Land Board confident that a Respondent, as lessee, can complete a sequestration project efficiently and professionally, so a Respondent might not want to plan on minimizing its past experience.

Five years is preferred.

Question 5: 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.”

Please clarify what is included in the 60-page limit. For example, is the rent and royalty proposal (lease) included in the 60-page limit?

Answer 5: The 60-page limit includes all documents as specified within the RFP solicitation aside from the excluded items listed in 3.3.3. Respondents should not submit a completed lease form;

this form will be completed by GLO staff post award.

Question 6: 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:

… (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)…”

When is the first annual rental payment due?

Answer 6: Annual rental payments will be due prior to the anniversary of the effective date of the lease agreement.

Texas General Land Office and School Land Board -4- RFP No. 23-SLB-1-LP Addendum No. 3

Question 7: For the rent and royalty proposal (lease), do we just fill in the blanks on the sample lease or is it possible to change some of the language? If submitting a proposal that includes multiple tracts, do the same lease terms apply to all the tracts or can there be different lease terms set for individual tracts? (i.e., different development and construction timelines)

Answer 7: Respondents should not submit a lease form. The lease form will be completed by GLO staff pursuant to dialogue and agreement with the successful Respondent. A Respondent’s proposal should include the details necessary for GLO staff to complete this form.

If a Respondent proposes to lease more than one of the described individual Lease Tracts, then the

Respondent may propose different lease terms for each of those Lease Tracts and must, in any case, submit a separate Proposal for each of these Lease Tracts. Each Lease Tract will be covered by a separate lease agreement, regardless of whether the lease terms applying to the Lease Tract are the same or different.

Question 8: EXHIBIT B. SAMPLE LEASE, 3.02(c) - “Carbon Offsets associated with the

CO2 transported to the Facility belong to Lessor.”

Does this mean that any voluntary carbon offsets realized as a result of permanently sequestering CO2 belong to the lessor?

Answer 8: Lessor reserves right to 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. The Lessor portion will be established following negotiation and agreement of the subject Lease with successful Respondents.

Question 9: ARTICLE VIII. SUBMISSION CHECKLIST

If several companies are participating in the same proposal, does every company need to submit the solicitation documents and supporting material or only the operator? If it varies per item/document, please clarify.

Answer 9: With respect to Art. VIII, Part I – Proposal of the Solicitation, information that is specific to the project – technical proposal, past projects (as discussed above), major contractor information, and rent and royalty proposal – can be a single, joint response. Information regarding the separate entities that make up a jointly-submitted Solicitation Response – affirmations, acknowledgments, respondent information, litigation history, and conflicts – should be submitted for each separate responding entity. Because they are short (maximum 2 pages) and require information about both the project, on the one hand, and the Respondent(s), on the other, a statement of minimum qualifications should be submitted for each entity that comprises the

“Respondent”.

Texas General Land Office and School Land Board -5- RFP No. 23-SLB-1-LP Addendum No. 3

Question 10: 2.2 LEASE AND TERM - “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.”

Please elaborate more about definition of the horizontal azimuth in the lease relinquishment.

Does it need to be 0 degree horizontal azimuth?

Answer 10: The clause requires that any relinquished area outline has a minimum width in any direction of greater than 5 miles, regardless of azimuth orientation.

Question 11: 5.1.2 (f) COMPANY PROFILE - “The company’s SAM unique entity ID registration number.”

If a partner’s SAM UEI number is in progress of assignment at time of submittal, how will this affect the solicitation response?

Answer 11: Unless your entity or any of its principals are subject to an active exclusion it will not affect the award of contract(s).

END OF QUESTIONS AND ANSWERS

Texas General Land Office and School Land Board -6- RFP No. 23-SLB-1-LP Addendum No. 3

In the submission of the Solicitation Response, the Respondent shall acknowledge receipt of this addendum; otherwise, the Solicitation Response may not be given consideration. The Respondent shall acknowledge receipt by returning a signed copy of this notice with the solicitation response.

RFP No. 23-SLB-1-LP

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

Addendum No. 3

Respondent Name: ____________________________________________________________

Mailing Address: ____________________________________________________________

City/State/Zip: ____________________________________________________________

Signature: ____________________________________________________________

THIS HEREBY COMPLETES ADDENDUM NO. 3