ESBD_File_318804_RFP 23-SLB-2-LP Addendum No. 2 Final.pdf

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

TEXAS GENERAL LAND OFFICE

AND

SCHOOL LAND BOARD

REQUEST FOR PROPOSALS NO. 23-SLB-2-LP

Addendum No. 2

Lease of Permanent School Fund Land for Storage of Carbon Dioxide in Galveston, Chambers, Brazoria, and Jefferson 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

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-2-LP Addendum No. 2

RFP 23-SLB-2-LP Questions and Answers

Question 1: Will the shapefiles for the two additional tracts in Jefferson County be added as well?

Answer 1: The new tracts are included in the shapefile. Addendum No. 1 indicates that Shapefiles 1 through 6 are replaced with a single zipped file “GalvestonAreaTracts_Shapefile”, comprised of the files previously posted as Shapefiles 1 through 6. The new zip file does include “Shapefiles 1 through 6”, however, the newly posted files are altered to include the two new sections.

Question 2: We would like to inquire if it is possible to obtain a list of everyone who has downloaded these two recently released RFP’s (in the subject above)? If that is not possible, would it be possible to get a list of the people who received the RFP notice via email?

Answer 2: The GLO does not administer the Electronic State Business Daily (ESBD) website, but the GLO believes the ESBD website does not track who has downloaded the RFP. You may direct questions about the ESBD to the Office of the Texas Comptroller of Public Accounts (“CPA”), at https://comptroller.texas.gov/. The Texas Procurement and Contract Management Guide requires official notices of ESBD postings be sent to all eligible vendors within the NIGP class and/or class/items designated for the procurement that are active on the Centralized Master Bidders List (CMBL), https://mycpa.cpa.state.tx.us/tpasscmblsearch/, which is maintained by CPA, is an online directory of vendors registered to receive bidding opportunities from State of Texas purchasing entities. Requests for GLO or PSF documents and other information may be sent to PIAlegal@glo.texas.gov.

Question 3: Is the RFP limited only to proposals for the lease of an entire tract (i.e., one of the 6 tracts shown on Exhibit C), or can a Respondent propose a lease for a portion of a designated tract? It is anticipated that during the course of evaluation of the RFP in connection with preparation of a proposal, portions of a tract may be determined to be undevelopable for CCS or not useable for a specific proposed Project, or that a projected CO2 plume could include portions of two adjacent tracts.

Answer 3: Yes, respondents are required to bid on the individual Lease Tracts as specified in the solicitation rather than portions of them.

Question 4: The maps attached to the RFP as Exhibit C include small areas within the 6 designated tracts that appear to be carved out and excluded from the acreage available for lease. Please clarify the intent with respect to these “holes” within the boundaries of the tracts. Assuming a Respondent is required to lease an entire tract, it may be challenging to develop a Project with a CO2 plume that does not affect these holes without also excluding other acreage in the tract for which a rental fee would nonetheless be required until acreage can be relinquished during the Operational period.

https://comptroller.texas.gov/ https://mycpa.cpa.state.tx.us/tpasscmblsearch/ mailto:PIAlegal@glo.texas.gov

Texas General Land Office and School Land Board -3- RFP No. 23-SLB-2-LP Addendum No. 2

Answer 4: The excluded areas within the Lease Tracts are locations with active mineral leases.

Any new CO2 Lease will take subject to existing mineral leases in the area. The GLO appreciates the fact that these exclusions may present challenges to the development of a CO2 sequestration reservoir. Some mitigation may be offered by the unprecedentedly large size of the Lease Tracts, potentially allowing for injection plans that maintain offsets from Lease boundaries.

Question 5: During the Operational period, does GLO expect a Respondent’s proposal to include an Annual Acreage Rental Fee that is in addition to the Injection Fee and other additional tax credit value each year, or that the rental fee would serve as a minimum payment amount such that it must only be paid for a given year to the extent that the aggregate Injection Fee for that year falls short of the Annual Acreage Rental Fee amount for the year?

Answer 5: The expected fee structure is as described in Section 6.1 of the RFP.

Question 6: With respect to the baseline minimum annual revenue target and the minimum Standard Annual Volume, given the substantial investment a lessee will make and the potential for termination of the lease if the minimum Standard Annual Volume is not maintained for the period agreed upon in the Lease, would the GLO allow a lessee to make a payment for any shortfall between the amount that would have been received had the minimum Standard Annual Volume been injected and the amount that was received based on the actual amount injected for a given year?

Answer 6: While these matters can be negotiated in the Lease, the GLO is interested in assuring that the PSF asset it is managing is being used efficiently and for its fullest value to the PSF, and not just being maintained indefinitely at a minimum operational level by the payment of the lowest possible minimum annual payment.

Question 7: If a Respondent is submitting a proposal to lease more than one Lease Tract, can the Respondent submit a separate Solicitation Response package for each Lease Tract, or are these to be combined into a single Solicitation Response package? If a Respondent can submit proposals for portions of tracts, can the Respondent submit separate Solicitation Response packages for each tract portion it proposes to lease?

Answer 7: Respondents should submit a single response for each prospective Lease it is interested in acquiring, regardless of how many Lease Tracts are proposed to be included in the Lease. The GLO will consider each submittal as a unique proposal. The GLO does not intend to lease portions of Lease Tracts.

Texas General Land Office and School Land Board -4- RFP No. 23-SLB-2-LP Addendum No. 2

Question 8: Is the GLO firm on the maximum periods for the Development and Construction Periods? The timeframes proposed are rather condensed given the scope of the Projects being proposed and the current and anticipated hurdles to obtaining all required permits, and easements as well as other operational hurdles, which are not in the sole control of the project operator. It is understood that these periods potentially can be extended, but this is not guaranteed and requires the payment of an extension fee in addition to the Annual Acreage Rental Fee.

Answer 8: Consideration was given to the fact that there are several challenges associated with such projects, including some that are outside of the control of the potential lessee. Based on available information, the GLO believes that the timeframes are reasonable. As noted in this inquiry, the Lease template includes provisions for extending the Development and Construction periods to address such setbacks.

END OF QUESTIONS AND ANSWERS

The GLO is still scheduled to have the 2nd Q&A addendum per the RFP schedule of events, Section 3.1.

Texas General Land Office and School Land Board -5- RFP No. 23-SLB-2-LP Addendum No. 2

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-2-LP

Lease of Permanent School Fund Land for Storage of Carbon Dioxide in Galveston, Chambers, Brazoria, and Jefferson Counties, Texas

Addendum No. 2

Respondent Name: ____________________________________________________________

Mailing Address: ____________________________________________________________

City/State/Zip: ____________________________________________________________

Signature: ____________________________________________________________

THIS HEREBY COMPLETES ADDENDUM NO. 2