Equinor Buys Stakes in USA Lithium Projects

Equinor ASA is acquiring stakes in two lithium project companies in the USA in a move to invest more in the energy transition.

Equinor said in a news release that it has entered into an agreement with Standard Lithium Ltd to acquire a 45 percent share in two lithium project companies in Southwest Arkansas and East Texas.

Under the terms of the agreement, Equinor 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,” according to the release. Equinor noted that it 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 percent and 45 percent of the two project companies, with Standard Lithium retaining operatorship. Equinor will support the operator with core competencies such as subsurface and project execution capabilities.

“Sustainably produced lithium can be an enabler in the energy transition, and we believe it can become an attractive business,” Morten Halleraker, senior vice president for New Business and Investments in Technology, Digital and Innovation at Equinor, said. “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”.

According to the release, lithium is an essential mineral in the energy transition and is required to meet the projected growth in electric vehicles and broader battery energy storage. 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.

DLE is a technology that extracts lithium from brines located 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 battery-grade lithium chemicals.

In 2021, Equinor Ventures invested in Lithium de France, which is developing DLE and geothermal projects in France.

Last month, Equinor approved its first two battery storage projects in the USA in line with its bid to become a leader in the energy transition. The two projects have a combined total capacity of 110 megawatts (MW), providing a valuable source of energy security for the Texas grid once operational, the company said in a separate news release.

Equinor noted that construction has begun on the Sunset Ridge Energy Center in Frio County, Texas; while its Citrus Flatts project in Cameron County, Texas is being prepared for implementation. Once operational, Citrus Flatts and Sunset Ridge are planned to be commercialized by Equinor’s wholly owned energy trading house, Danske Commodities.

To contact the author, email rocky.teodoro@rigzone.com