Liquefied Natural Gas to Power IPP Procurement Programme

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1 Liquefied Natural Gas to Power IPP Procurement Programme Request for Qualification 5 October 2016

2 Outline of Presentation Procurement approach Purpose of the RFQ Framework of the RFQ Project Participants Economic Development Procurement Timelines Contact with the IPP Office 5 October

3 We are seeking to procure the Project, comprising: LNG procurement and delivery; Procurement approach LNG storage and regasification facilities via FSRU (or similar alternate technologies); Port infrastructure, including fixed maritime structures and modifications; Gas transmission pipelines to connect the FSRU with the new power generation facility; LNG and/or gas distribution hub(s) for third party off take; Power plant, including the high voltage connection to the electrical grid. The procurement will be undertaken in two phases: the first being the RFQ phase, and the second being the RFP stage A separate procurement process for each port will be pursued TNPA is the port landlord, the Department is working with TNPA in respect of the alignment of the procurement processes The Department working with NERSA regarding regulatory alignment 5 October

4 STAGE 1 Pre-qualification Phase Release RFQ & access Data Room Procurement approach (cont) Short-list Bidders & release approved RFP SHORT-LISTED BIDDERS PROCEED TO STAGE 2 Release PIM Prepare RFQ response, Briefing Notes Approved RFP prepared to international standards Submit RFQ Evaluate RFQ response Engagement Process Amend RFP & DoE approval Release final RFP STAGE 2 Request for Proposal Phase Prepare RFP response, Briefing Notes Submit RFP Notice of Preferred Bidder award Evaluate of RFP response Preferred Bidder award

5 Data Room includes Basic Engineering Terminal layout Marine structures Dredging and reclamation Breakwaters and revetments Gas pipeline and distribution hub Wave modelling Downtime assessment Full mission ship manoeuvring simulation Vessel motion assessment Environmental studies Power Generation site assessment studies Procurement approach (cont) 5 October

6 Procurement approach (cont) Fees for participation in the procurement process IPP Office is self-funding. We have spent a significant amount of money in preparing the procurement documents and preparatory studies. Therefore, it needs to recover its costs of preparing the procurement documents and set-up costs: Registration fee to access the RFQ (R75 000) Access fee for RFQ data room (R ) RFP access fee (R ) The Department wishes to attract committed bidders. 5 October

7 Purpose of the RFQ The RFQ sets out to provide: the rules of participation in the LNG to Power IPP Procurement Programme (the Programme ); the framework for the procurement process and timeframes for the procurement process; information done to-date by the Department; information so as to allow Respondents to prepare RFQ Responses pursuant to the Programme; and the qualification requirements to shortlist the Pre-qualified Bidders. 5 October

8 Framework of the RFQ The RFQ is set out as follows: Part A (General Information Requirements and Rules) Part B (Qualification Criteria and RFQ Response Returnable Schedules) Volume 1 (Qualification Criteria) Volume 2 (RFQ Response Returnable Schedules) 5 October

9 Project Participants Within the bundled approach, the participants within the consortium may include the following: Developer (incl. operator and maintainer) of a Gas-Fired Power Plant; LNG Supplier; Regasification and storage unit owner and operator. As such, Project Participants will define the Bidder and provide the basis on which a Bidder pre-qualifies A single Key Member may be proposed to meet the requirements for more than one Qualification Criterion. 5 October

10 Project Participants (cont) A Bidder may participate and pre-qualify under one or both RFQs and bid for both Projects A Bidder can be awarded preferred bidder status for both Projects. At RFP stage, the consortium subcontractors may include: Power generation technology providers; EPC contractors (in respect of the port terminal, pipelines and power generation); and and/or other sub-contractors. 5 October

11 South African Participation Project Participants (cont) There is a need for South African participation through a combination of State Owned Company ( SOC ) and Black Economic Empowerment entity participation in a Project: SOC participation Broad-Based Share Ownership Scheme participation Black Economic Empowerment Threshold for South African participation is 35% Points will be awarded in the RFP for exceeding this threshold. As further described in RFQ and RFP stage: Equity position will be reserved, will be funded; SOC and Broad-Based Share Ownership Scheme will participate at financial close and on pari passu basis. 5 October

12 Objectives Economic Development Collectively refers to localization and black economic empowerment initiatives: To promote industrialisation Within a structured framework for the targeted interventions of Government Government seeks to use the procurement and development of the gas industry to achieve its stated objectives 5 October

13 Economic Development (cont) Elements within the Economic Development framework ownership by black people; participation by South African entities; promote industrialisation, which will be structured to extract optimum local content spend on locally procured goods and services; skills development, which will focus on the development of skills of black people; enterprise and supplier development, which focuses on subcontracting to smaller enterprises; and socio-economic development, focussed on education, health care, social and welfare projects. 5 October

14 Procurement Timelines Milestones Anticipated Dates Issue of RFQ November 2016 Response submission date February 2017 Announcement of Pre-qualified Bidders April 2017 Issue of the approved RFP April 2017 Engagement process between Prequalified May 2017 Bidders and the DoE Release of final RFP August October

15 Contact with the IPP Office All communication with the IPP Office shall be through the Project Officer: 5 October