Under the terms of the agreement, Equinor will invest up to $160m in exchange for a 45% stake in Standard Lithium’s two lithium projects in southwest Arkansas and east Texas
Aerial footage of the Southwest Arkansas project. (Credit: Standard Lithium)
Canadian mining company Standard Lithium has teamed up with Norwegian oil and gas company Equinor to advance the development of its sustainable lithium projects in the US.
Under the terms of the agreement, Equinor will invest up to $160m in exchange for a 45% stake in Standard Lithium’s two lithium projects in southwest Arkansas and east Texas.
The investment includes a $30m cash payment in compensation for the previous costs.
Equinor will fund a $60m work program at the acquired assets, comprising $33m Standard Lithium’s share and $27m its share.
The Norwegian company will also make milestone payments of up to $70m to Standard Lithium upon both parties reaching a final investment decision (FID).
Standard Lithium will own the remaining 55% of the two lithium projects and retain the operatorship, and Equinor will support the operator with core competencies.
Standard Lithium CEO Robert Mintak said: “This partnership with Equinor is a major accomplishment for Standard Lithium. It has long been our belief that success in this sector hinges on strategic partnerships with companies who share our vision and bring complementary strengths.
“Equinor’s culture and values align with ours in using innovation, integrity and responsible development to enable the global energy transition.
“With this partnership, we have the opportunity to accelerate our progress and carve out a significant role in shaping the future of sustainably produced lithium.”
According to Equinor, 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.
It is produced from subsurface reservoirs through an emerging production method, Direct Lithium Extraction (DLE) technologies, with a lower environmental footprint.
The DLE method involves lithium-rich saltwater from deep underground reservoirs that cannot be used for drinking or agriculture purposes.
The technology is said to produce high-purity lithium concentrate which can be converted into battery-grade lithium chemicals using conventional processing technologies.
Equinor started testing DLE technologies in 2018 to build an understanding of scale-up and pre-treatment of subsurface brines and processing to battery-grade lithium chemicals.
Citi served as financial advisor to Standard Lithium, Skadden, Arps, Slate, Meagher & Flom and Cassels Brock and Blackwell as legal counsel to Standard Lithium on this transaction.
Equinor new business and investments in technology, digital and innovation senior vice president Morten Halleraker said: “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 utilise core technologies from oil and gas in a complementary partnership to mature these projects towards a possible final investment decision.”