Norwegian oil giant Equinor is diving into the promising world of lithium brine projects in Texas and Arkansas, aiming to invest over $130 million in this emerging business.
Equinor recently sealed the deal with Standard Lithium to snag a 45% stake in two lithium projects spanning Texas and Arkansas. These projects tap into the lithium-rich Smackover formation, and Equinor’s hefty investment could help propel them forward.
Standard Lithium, based in Vancouver, Canada, will retain a 55% ownership and oversee project operations. Equinor brings not only funding but also valuable expertise in subsurface exploration and project management to the table.
Last year, Standard Lithium made waves by uncovering North America’s highest concentration of lithium brine in east Texas.
As part of the partnership, Equinor will reimburse Standard Lithium $30 million for previous capital investments. Additionally, Equinor has committed $33 million for future expenses to advance the projects toward large-scale development decisions. If the projects progress, Equinor may dish out up to $70 million in milestone payments to Standard Lithium.
Morten Halleraker, Equinor’s senior VP for new business and investments, hailed the move, calling it a low-risk opportunity to leverage oil and gas technologies for lithium projects.
Standard Lithium CEO Robert Mintak expressed excitement over the partnership, emphasizing the importance of collaborating with like-minded companies.
This investment reflects a growing interest in direct lithium extraction (DLE), a cutting-edge technology for obtaining high-purity lithium from brines, ideal for battery production. Equinor has been exploring DLE since 2018, recognizing its potential.
Equinor’s venture into the Smackover region mirrors ExxonMobil’s efforts, as the latter aims to extract enough lithium by 2030 to power a million electric vehicles. ExxonMobil has secured a significant acreage in southern Arkansas for this purpose, signaling the industry’s bullish outlook on lithium’s future.