Equinor enters US lithium projects in Arkansas, Texas

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

Lithium is required to meet the projected growth in electric vehicles and broader battery energy storage, and production of lithium from subsurface reservoirs with Direct Lithium Extraction (DLE) technologies is emerging as a production method with a lower environmental footprint than traditional methods, Equinor said.

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.