Equinor enters into partnership with Standard Lithium to better deliver energy transition enabler

Equinor has secured an agreement with Standard Lithium Ltd to acquire a 45% share in two lithium project companies in the southern US.

Announced by the Norwegian energy supplier on Wednesday, the deal centres on sites in southwest Arkansas and east Texas where it will apply its oil and gas expertise.

Promising business step

Morten Halleraker, Senior Vice President for New Business and Investments in Technology, Digital and Innovation at Equinor, explained that the investment is an option with limited upfront financial commitment.

“Sustainably produced lithium can be an enabler in the energy transition, and we believe it can become an attractive business,” he went on.

“We can utilise core technologies from oil and gas in a complementary partnership to mature these projects towards a possible final investment decision.”

The deal in numbers

Equinor explained that under the terms of the agreement it will compensate Standard Lithium for $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.

Equinor will make milestone payments of up to $70 million in aggregate to Standard Lithium if a final investment decision is taken.

Standard Lithium and Equinor will respectively own 55% and 45% of the two project companies, with Standard Lithium retaining operatorship.

This collaboration underscores both companies' dedication to advancing the transition to clean energy technologies.

Transition mineral requirements

Lithium has emerged as an essential mineral in the energy transition, notably required to meet the projected growth in the electric vehicle market and broader battery energy storage.

With sustainability in the spotlight, production of lithium from subsurface reservoirs with Direct Lithium Extraction (DLE) technologies has been emerging as a production method with a lower environmental footprint than traditional alternative methods.

Better way of working

DLE produces lithium from lithium-rich saltwater, typically from deep underground reservoirs that cannot be used for drinking or agriculture purposes.

The lithium is separated from other brine constituents, such as sodium, calcium and magnesium, by bringing the brine into contact with a medium designed to selectively attract the lithium.

DLE technology then re-injects the brine, minus the lithium, back into the subsurface through a second injector well. The result is a high purity lithium concentrate which can be converted into battery grade lithium chemicals using conventional processing technologies.

Equinor will support Standard Lithium with core competencies such as subsurface and project execution capabilities.