Equinor Energy AS has agreed to acquire a 45% share in two lithium projects in the Smackover formation in southwest Arkansas and east Texas from Standard Lithium Ltd. for up to $160 million.
Under the terms of the agreement, Equinor will pay Standard Lithium $30 million in past costs net to the acquired interest and will carry Standard Lithium's capex of $33 million to progress the assets towards a possible final investment decision (FID). Equinor will make milestone payments of up to $70 million in aggregate to Standard Lithium if FID is taken.
Standard Lithium and Equinor will respectively own 55% and 45% of the two project companies, with Standard Lithium retaining operatorship. Equinor will support the operator with subsurface and project execution capabilities, the company said in a release May 8.
“Sustainably produced lithium can be an enabler in the energy transition, and we believe it can become an attractive business. This investment is an option with limited upfront financial commitment. We can utilize core technologies from oil and gas in a complementary partnership to mature these projects towards a possible final investment decision,” said Morten Halleraker, senior vice-president for new business and investments in technology, digital, and innovation at Equinor.
Lithium in energy transition
DLE is a technology that extracts lithium from brines deep underground and reinjects the brine without lithium back into the subsurface through a second injector well.
Equinor began testing DLE technologies in 2018 to build an understanding of how to scale-up including pre-treatment of subsurface brines and processing to battery grade lithium chemicals.
In 2021, Equinor Ventures invested in Lithium de France which is developing DLE and geothermal projects in France.
ExxonMobil's lithium ambitions
Last year, US-major ExxonMobil began work on its first phase of North America lithium production, also in southwest Arkansas (OGJ Online, Nov. 14, 2023).
The operator—with a goal of becoming a leading supplier of lithium for use in electric vehicle batteries by 2030—says the geology of the Smackover formation is well understood through its history as an oil and natural gas producer, and that the company will use conventional oil and gas drilling methods to access lithium-rich saltwater from reservoirs about 10,000 ft underground.
Mikaila Adams | Managing Editor - News
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was named Managing Editor - News in 2019. She holds a degree from Texas Tech University.
