Appendix 1 Invitation to tender

Request for Proposals

EWG 06/2008A

Assessment of the Capture and Storage Potential of CO2 Co-Produced with Natural Gas in South-East Asia

Further assistance regarding this Request for Proposals may be obtained from:

Dr. Frank Mourits

Natural Resources Canada

Phone: +1-613-947-3482

Fax: +1-613-995-6146

Email: fmourits@nrcan.gc.ca

Lodgment of Tenders to:

Mr. Sun Tao

APEC Secretariat

35, Heng Mui Keng Terrace

Fax - 65-6891-9690

Email: st@apec.org

(Reference EWG09/2008A)

Closing Time and Date: 5.00 pm, Singapore time, Friday, 27 March 2009

Request for Proposals

This request for proposals is for a consultancy to assess the techno-economic feasibility of reducing carbon dioxide (CO2) emissions resulting from natural gas production in South-East Asia through carbon capture and storage (CCS) technologies, specifically by re-injecting the gas into subsurface geological formations. The project will explore potential near-term opportunities for commercially viable CCS and present at least two case studies that will demonstrate how CCS technologies could be applied in natural gas production operations in the South-East Asian region.

The main output of this consultancy will be a report providing guidance, especially for APEC developing economies in South-East Asia, on the technical, economic and other aspects of re-injecting CO2 produced during natural gas production into depleted oil or gas reservoirs, or deep saline formations. The report will include:

  • Assessment of the capital and operating costs to re-inject the CO2 separated during natural gas production, including transportation if the storage site is remote from the production site;
  • Identification and analysis of specific CCS-related issues;
  • Assessment of the potential benefits in the form of enhanced oil or gas production and reduced greenhouse gas emissions;
  • Conclusions and recommendations for potential widespread applications in the South-East Asian region.

The project will be conducted in consultation with a Project Steering Committee, made up of the Project Overseer and members of the APEC Expert Group on Clean Fossil Energy (EGCFE), augmented, where needed, with government and industry representatives from the project region. In order to ensure that the project meets APEC Energy Working Group (EWG) expectations and follows APEC project guidelines, the Project Steering Committee will be actively involved throughout the project, including in consultant selection, final project definition, evaluation of the results and review of the draft report.

Background

In order to meet their future energy needs, developing APEC economies are anticipated to sharply increase their consumption of predominantly fossil fuel energy. As a result, carbon dioxide emissions from energy production and use in the APEC region are forecast to rise by 60 per cent between 1999 and 2020. Technologies to store (or sequester) CO2 in geological formations have the potential to provide a viable, medium-term option for developing APEC economies to retain the benefits of deriving energy from low-cost fossil fuels, such as coal, while at the same time reducing CO2 emissions to the atmosphere and, thus, promoting environmentally sustainable growth.

There is a sense of urgency, which was highlighted by the International Energy Agency (IEA) in their 2004 statement that "governments need to take action now to ensure that CCS technologies are developed and deployed on a large scale over the next few decades". This urgency was again emphasized by G8 Leaders in July 2008, who, at their summit meeting in Hokkaido, Japan, declared that they "strongly support the launching of 20 large-scale CCS demonstration projects globally by 2010, taking into account various national circumstances, with a view to beginning broad deployment of CCS by 2020".

There are presently significant efforts in progress in the area of CCS in Australia, Canada, the European Union, Japan, Norway, the United States and other industrialized economies across the world. The deployment of CCS is at varying stages of implementation, and a number of demonstration or commercial projects are operating, under way or being planned. In addition, numerous CCS feasibility studies are being carried out by the IEA Greenhouse Gas R&D Programme, the Carbon Sequestration Leadership Forum (CSLF) and many other organizations.

A significant source of CO2 emissions in South-East Asia is the production of natural gas (e.g., Thailand, Vietnam, Malaysia and Indonesia). The raw gas often contains considerable quantities (e.g., 25%) of CO2, which is currently separated and released into the atmosphere – thus contributing to climate change and global warming. As an example, more than half a million tonnes of CO2 annually is released from natural gas produced in the Gulf of Thailand alone. Fortunately, opportunities may exist to re-inject the CO2 into subsurface geological formations, either into partially depleted oil or gas reservoirs or into deep saline formations.

The use of captured CO2 for injection into partially depleted oil or gas reservoirs to enhance the recovery of the remaining oil or gas is a near-term storage option, which has found widespread application in the United States and is increasingly practiced in Canada and other parts of the world. The storage of CO2 into deep saline formations is generally seen as a somewhat longer-term option with very large storage potential. This technology is being considered or demonstrated in a growing number of projects around the world. Examples of large, commercial-scale natural gas production operations with CO2 geological storage include the Sleipner and Snøhvit projects in Norway, the In-Salah project in Algeria and the Gorgon project in Australia.

Building on this body of experience and knowledge of injecting and storing CO2 in subsurface formations, this study will look at the applicability of the above two storage options to gas production operations in South-East Asia and assess their techno-economic feasibility. It is expected that an earlier APEC assessment study of the geological storage potential of CO2 in APEC economies (Phase I – EWG 06/2003), which showed that suitable geological formations exist in the South-East Asian region, can be utilized as a useful screening tool. It is further anticipated that local geological services and the natural gas producers in the study areas may be asked by the consultant to furnish some of the site-specific geological and operational information that will be needed for the feasibility study. It will be beneficial to establish a good working relationship with the producers, as it will be important to hear their views on the concept of re-injecting CO2 and any operational issues they may anticipate.

Objectives

The main objective of the project is to assess the techno-economic feasibility of reducing CO2 emissions resulting from natural gas production in South-East Asia through the application of CCS technologies, specifically by re-injecting the gas into subsurface geological formations. The project will explore potential near-term opportunities for commercially viable CO2-enhanced oil or gas recovery, and the longer-term storage of CO2 in deep saline formations. At least two case studies will be presented to demonstrate how CCS could be applied to natural gas production operations in the South-East Asian region. The project will produce a report providing guidance, especially for developing APEC economies in South-East Asia, on the technical, economic and other issues related to re-injecting CO2 from natural gas production into depleted oil or gas reservoirs or deep saline formations.

A secondary objective of the project is a combination of promoting awareness, building capacity and developing human capital in the discovery of CCS. By being exposed to and/or involved in the geological assessments and CCS technology evaluation methodologies being carried out by the consultant for specific sites in their own economies, decision makers from government and industry will be "learning by doing". They may become involved by taking part in the study itself, attending debriefs throughout the study or participating in a workshop at the conclusion of the study. Through the transfer of CCS technology knowledge and expertise, local capacity will be developed and/or strengthened. This knowledge base will become the foundation for follow-on CCS work that the developing economies may want to initiate as they are pursuing their long-term energy sustainability goals. In circulating the final report of the project, and as part of workshop presentations, recipients and participants will be asked to complete a survey, so they can give their views on the content and utility of the report, the benefits they expect to derive from it, and the degree to which the project contributed to building awareness of and capacity in CCS in the recipients' economy.

The project will build on the successful CCS work the EGCFE has carried out since 2003, which includes exploring the potential of CO2 subsurface storage (geological sequestration) in APEC economies (Phase I – EWG 06/2003); developing training materials for use in CCS training workshops (Phase II – EWG 02/2004); and hosting two capacity-building and technology transfer workshops in China and Mexico (Phase III – EWG 07/2005). Reports on these projects are available at http://www.ewg.apec.org/.

Scope of Work

The project will be carried out and completed by 31 December 2009 by a consultant with appropriate oil and gas production expertise, a thorough understanding of the issues involved in CCS, and specific knowledge and expertise of the technologies and economics of CO2 injection and storage. The consultant will work closely with local governments and the oil and gas companies operating in South-East Asia, both of which are expected to be the main sources of the geological and technical data that will be required. A Project Steering Committee, comprising the Project Overseer, EGCFE experts and government and industry representatives from the project regions, will provide guidance at appropriate stages. In-kind industry support will be sought.

The project will include the following staged activities:

  1. Data Collection
  2. - review the experiences to date in APEC and OECD economies, the International Energy Agency, and by other relevant international bodies with respect to the technical, operational, economic, regulatory and other challenges facing the re-injection of CO2 produced in natural gas production operations;

    - identify and collect data on major natural gas production facilities in developing APEC economies in the South-East Asian region. Potential economies to be included are: Brunei Darussalam, Indonesia, Malaysia, Papua New Guinea, Philippines, Thailand and Viet Nam). A final selection will be made in consultation with the Project Steering Committee;

    - obtain required geological data from natural gas producers, the geological services of the APEC economies included in the study, or any other relevant sources;

  3. Analysis, Evaluation and Assessment
  4. - identify and assess potential suitable CO2 storage reservoirs in the proximity of the natural gas production sites;

    - develop an estimate of the capital and operating costs to re-inject the CO2 separated during natural gas production, including pipelining if the storage site is more remotely located from the production site;

    - estimate the potential revenues from enhanced oil or gas production;

    - estimate the potential greenhouse gas emission reductions resulting from the re-injection of CO2 produced in natural gas production operations;

    prepare at least two case studies exemplifying the challenges and benefits of re-injecting CO2 from natural gas production (one study to include enhanced oil or gas recovery; the second to be limited to direct CO2 injection);

    identify and analyze specific CCS-related issues and/or barriers, including but not limited to: S technical issues; S legal and regulatory issues; S commercial and financial issues; S safety, environmental and security issues; S public information and consultation issues; S potential CDM (Clean Development Mechanism) opportunities.

    prepare conclusions and recommendations with respect to potential applications of this CCS technology in the APEC economies included in the study and beyond the region.

  5. Reporting and Presentations
  6. - complete a preliminary draft final report and submit it for comments and approval to the Project Steering Committee;

    - taking into account the comments and suggestions provided by the Project Steering Committee, present the results, conclusions and recommendations at an appropriate regional workshop and/or the annual APEC EGCFE Technical Seminar (Korea, October or November 2009);

    - in circulating the preliminary draft final report and as part of the workshop presentation, conduct a survey and request feedback on:

    appropriateness of the methodologies used;

    degree to which the report provides new and relevant insights;

    degree to which the results may be used by government and industry decision-makers when considering options to reduce CO2 emissions in their economy;

    degree to which the project contributed to building awareness of and capacity in CCS.

    - incorporating the comments and suggestions previously provided by the Project Steering Committee and including the feedback received from the workshop and the results of the survey, finalize the draft report, ensuring that editing and formatting meet high professional standards and comply with APEC style and nomenclature guidelines, and submit it to the Project Steering Committee for final approval

    - submit electronic copies (MS Word and PDF formats) of the approved final report on CD-ROM to the Project Overseer and the APEC and EWG Secretariats by 31 December 2009.

Timetable and Deliverables

The following timetable for the completion of the project is suggested. The consultant may propose an alternative schedule as long as the project is completed by the end of 2009.

Activity Deadline
1 Issuance of RFP 27 February 2009
2 Deadline for submission of Proposals to APEC Secretariat 27 March 2009
3 Consultant selected and recommendation referred to APEC Secretariat for contract negotiations 6 April 2009
4 Contract awarded by APEC Secretariat April 2009
5 Data collection May-July 2009
6 Analysis, evaluations and assessments June-September 2009
7 Preliminary draft final report submitted to Project Steering Committee for review and approval October 2009
8 Workshop presentation October-November 2009
9 Draft final report submitted to Project Steering Committee for review and approval 30 November 2009
10 Final report completed and submitted to Project Overseer and APEC/EWG Secretariats 31 December 2009

NOTE: The project must be completed with all monies disbursed by 31 December 2009

Qualifications of the Consultant

Consultants wishing to tender for this project should present a proposal to the APEC Secretariat by close of business on 27 March 2009. The Proposal should include evidence of ability and experience to undertake the specified tasks in this Request for Proposal, specifically:

an outline of all project activities, sufficiently detailed to demonstrate that the consultant:

(a) has a clear understanding of the tasks and methodologies to be applied;

(b) has original suggestions that can improve the study and ensure a quality product;

(c) can complete the work efficiently and provide deliverables on time and on budget;

  1. evidence of a high level of technical and business knowledge of and expertise with oil and natural gas production operations; experience with such operations in developing APEC economies would be an asset;
  2. evidence of in-depth knowledge of and experience with CCS, in particular with respect to the injection and geological storage of CO2;
  3. familiarity with the issues affecting the potential of CCS, including technical, economic, legal and regulatory issues, and with impediments to the uptake of CCS;
  4. prior evidence of the capability to deliver high-quality projects and outputs on time and within budget;
  5. evidence of familiarity with and/or having contacts in the oil and gas industry carrying out natural gas production operations in South-East Asia, and with local government agencies involved in decisionmaking in the area of energy supply and environmental protection.

The consultant should provide a Résumé for each person proposed to participate in the project. When reviewing proposals, specific attention will be given to qualified women proposed by the consultant to work on the project. It will be important to involve women in the organization of the workshops as well as the management of the project and preparation of the final report. The proposal should adhere to the priorities of the Framework for the Integration of Women in APEC ("Accelerate the progress of integrating women in the mainstream of APEC processes and activities" and "Promote and encourage the involvement of women in all APEC fora").

Budget

The total approved budget for this study is up to US$185,010, including US$85,010 from APEC funding and up to US$100,000 (not open for bidding) from anticipated in-kind support by Canada, the oil and gas industry, and local governments. This budget is consistent with the anticipated costs of carrying out the required work and preparing/completing the final report, including all associated costs (labor, fees, travel, etc.).

The consultant will prepare an itemized budget (up to US$68,000) and submit this with the proposal. This budget must include:

  • Consulting fees, including contractor and subcontractor (where required) fees;
  • Consultant's secretary cost and other administrative costs associated with the project.

Funding for travel, publication, photocopying and telecommunication costs (US$17,010) will be handled and be reimbursed by the APEC Secretariat, subject to signature of travel undertaking and submission of relevant invoices. It is anticipated that the consultant will need to travel up to three times to Asia, including travel for the workshop presentation.

http://www.apec.org/apec/publications/free_downloads/2002.MedialibDownload.v1.html?url=/etc/medialib/apec_media_library/downloads/taskforce/aggi/pubs/2002.Par.0003.File.v1.1

The self-financed portion of the project reflects self-funding by Canada for project oversight and management, and the anticipated in-kind support from the oil and gas industry operating in the South-East Asian region and local government agencies. This in-kind support covers the provision of geological data, operational/production data and other pertinent information, as well as staff time to discuss the emerging results on a regular basis.

Proposal Information

Inquiries on this request for proposals should be addressed to:

Dr. Frank Mourits

Natural Resources Canada

580 Booth Street, Room 11D9-2 Ottawa,

Ontario Canada K1A 0E4

Phone: +1-613-947-3482

Mobile: +1-613-355-2277

Fax: +1-613-995-6146

Email: fmourits@nrcan.gc.ca

and

Mr. Sun Tao Director (Program)

APEC Secretariat

35, Heng Mui Keng Terrace

Singapore 119616

Tel: 65-6891-9652

Fax: 65-6891-9690

E-mail: st@apec.org

Conditions of the RFP

The detailed conditions of this RFP are listed in the attachment.

Attachment

Conditions of this Request for Proposals

1. APEC PREFERENCE PROGRAM

It is the policy of APEC to award contracts to firms from Member Economies when this can be done consistent with an expectation of efficient performance of the Contract, at prices no higher than are obtainable elsewhere, and which can be done without restricting competition. If subcontractors are used, the Contractor shall use its best efforts to place subcontracts in accordance with this policy.

2. ASSIGNMENT

Assignment of the Contract or any benefit arising there under or any interest therein will be grounds for terminating the Contract at the option of the APEC Secretariat.

3. CHANGES TO SCOPE OF CONTRACT

The terms of the Contract may be varied only by written agreement between the APEC Secretariat and the Contractor.

4. CONTRACTOR LIABILITY FOR PERSONAL INJURY AND/OR PROPERTY DAMAGE

The Contractor indemnifies and holds harmless the APEC Secretariat for loss or damage or injury suffered by any person, however and wherever caused, by the Contractor, its employees, agents and contractors during the performance of the Contract.

5. DEFAULT

5.1. In the event of a Default by the Contractor, the APEC Secretariat shall write to the Contractor setting out the Default. If the Contractor fails to remedy the Default within the time specified in writing by the APEC Secretariat, the APEC Secretariat may forthwith terminate the Contract without prejudice to the rights of any parties accrued to the date of termination.

5.2. A Default means any breach of a condition of the Contract or any substantial breach of a warranty in the Contract, including, but not limited to:

  • failure to perform the Contract within the agreed time, or
  • failure to deliver equipment of adequate capability, quality or reliability.

6. DISPUTES

In the event of any dispute concerning the meaning to be given to any term in the Contract, a determination by the APEC Secretariat in writing as to the meaning shall be final and conclusive.

7. EXAMINATION OF RECORDS

The APEC Secretariat, or its designated representative, shall have access to the Contractor's directly relevant books, documents, papers, and other records involving transactions related to the Contract. This access shall commence from the date of signing of the Contract and shall continue for a period of 3 years following the completion of the Contract.

8. RIGHTS IN DATA -GENERAL

The APEC Secretariat shall be deemed the owner of, and shall be deemed to have full rights (including copyright) in all data, regardless of form, format, or media, resulting from performance of the Contract, all data regardless of form, format, or media, used in performing the Contract; all data delivered under the Contract constituting manuals or instructional and training material; all processes delivered or furnished for use under the Contract; and all other data delivered under the Contract.

Subject to the prior written approval of the Executive Director of the APEC Secretariat ("the Executive Director"), the Contractor may have the right to use, release to others, reproduce, distribute, or publish any data first produced or specifically used by the Contractor in the performance of the Contract. For example, the information may be used to promote economic development with any benefits accruing to the originator.

The APEC Secretariat may deliver to the Contractor data necessary for the performance of the Contract. Title to APEC Secretariat furnished data remains with the Secretariat. The Contractor must use any data which it receives from the APEC Secretariat only in connection with the Contract.

To the extent it receives or is given access to data necessary for the performance of the Contract which contains restrictive markings, the Contractor shall treat the data in accordance with such markings unless otherwise specifically authorized in writing by the Executive Director.

The Contractor shall not disclose any information received or generated under the Contract, unless its release is approved in writing by the Executive Director and shall assert any privilege allowed by law to defend vigorously the APEC Secretariat's rights to confidentiality.

9. SUSPENSION OF WORK

The Executive Director may, at any time, by written order to the Contractor, suspend all, or any part, of the work, if any, being carried out by the Contractors, its officers, employees, agents or subcontractors, for a period of up to 90 days after the order is delivered to the Contractor, and for any further period as the circumstances may require at the discretion of the Executive Director. Upon receipt of the order, the Contractor shall immediately comply with its terms and take all reasonable steps to minimize the costs incurred by the stoppage relevant to the work covered by the order. Any associated adjustment to the Contract price and/or time for completion will be negotiated between the Executive Director and the Contractor.

10. TERMINATION FOR CONVENIENCE OF THE SECRETARIAT

The Executive Director, by written notice and without giving any reasons therefore, may terminate this Contract, in whole or in part as he sees fit by issuing a Notice of Termination. If this Contract is terminated, the rights, duties, and obligations of the parties, including compensation to the Contractor, shall be negotiated between the Executive Director and the Contractor, but in no event shall it exceed the total value of the Contract.

After receipt of a Notice of Termination and except as directed by the Executive Director, the Contractor shall immediately stop work as specified in the notice. After termination, the Contractor shall submit a final termination settlement proposal to the Executive Director in the form and with the certification prescribed by the Executive Director. If the Contractor fails to submit the termination settlement proposal within the time allowed, the Executive Director may determine, on the basis of information available, the amount, if any, due to the Contractor because of the termination and shall pay the amount so determined.

11. LANGUAGE

All drawings, documents, information, correspondence, test reports and such like items shall be in the English language.