Showing posts with label Equinor Energy. Show all posts

Tuesday, December 16, 2025

"lithium is no longer just an EV story. It’s becoming an AI story. A big one"!

"Lithium is becoming an AI story — as artificial intelligence accelerates data center growth, massive new energy storage capacity will be needed, and lithium is at the core of that infrastructure."

⚡️ Smackover Lithium — A Strategic Resource for the AI & Energy Storage Era

🧠 Why Lithium Is Now an AI Story

The rise of AI and machine learning has triggered explosive growth in data centers — and those facilities demand huge amounts of constant and backup power.

As more AI servers come online, energy storage will become essential to keep data flowing even during outages or demand spikes.
Lithium-ion batteries, already dominant in EVs, are now being deployed at scale in AI-enabled data centers, grid storage, and backup power arrays.
This means lithium is no longer just about electric vehicles — it’s about powering the AI economy.

📍 What Is Smackover Lithium?

Smackover Lithium is a large-scale lithium brine project in the U.S. Southeast. It aims to supply high-grade lithium from underground brine reservoirs — ideal for EVs, grid batteries, and AI-driven data center storage.

The project spans southern Arkansas and east Texas, sitting atop the Smackover Formation, a vast underground structure filled with mineral-rich brine.
Unlike hard-rock lithium mining, brine projects like Smackover offer lower surface impact and can be processed with cleaner, faster DLE technology.

📦 How Big Is It?

U.S. Geological Survey estimates the Smackover Formation could host 5+ million metric tons of lithium — one of the largest in North America.
The project has two main zones:
- SWA Project (Southwest Arkansas) — Flagship development site with high lithium concentrations (437 mg/L average)
- East Texas (Franklin Project) — Newly announced resource area with some of the highest lithium-in-brine grades recorded in the U.S. (up to 806 mg/L)

🛠 Who Owns & Operates It?

Company	Role	Ownership
Standard Lithium (SLI)	Operator, technology provider	55%
Equinor ASA (EQNR)	Strategic partner, capital provider	45%

Standard Lithium is a lithium tech company using Direct Lithium Extraction (DLE).
Equinor, a global energy giant (formerly Statoil), is supplying capital and deep expertise in subsurface development.

⚙️ Technology Edge: Direct Lithium Extraction (DLE)

Smackover Lithium uses DLE, a newer process that:

Pulls lithium directly from brine using selective filters.
Eliminates large evaporation ponds.
Returns most water to the ground, reducing environmental footprint.
Achieved >99% lithium recovery in pilot operations.

This makes Smackover more scalable, cost-efficient, and ESG-friendly than older methods.

💵 Recent Big Developments (2025)

💰 1. Over $1 Billion in Project Finance Interest

Smackover Lithium received expressions of interest from major export credit agencies — including U.S. EXIM Bank and Export Finance Norway — and global banks.
These groups are interested in providing over $1.1 billion in senior debt to help fund Phase 1 of the SWA project (total capex ~$1.45B).
The project also received a $225 million U.S. Department of Energy (DOE) grant.

📌 Why this matters: Big, institutional money doesn’t chase hype — it follows viability. This shows Smackover is seen as real, scalable, and strategic.

📈 2. Positive Feasibility Study Completed

In September 2025, Smackover Lithium released a Definitive Feasibility Study (DFS) showing:
- Strong project economics
- 22,500 tonnes per year lithium output (Phase 1)
- Project NPV (net present value): $1.7 billion+

📌 This is a critical step before a final decision to build (expected late 2025).

🌎 3. New Resource Discovery in Texas

East Texas “Franklin Project” was added with a maiden inferred resource.
Contains extremely high lithium grades (up to 806 mg/L) — among the best in North America.
Offers optional scale-up potential beyond Arkansas.

🏭 Location Advantage

Smackover sits close to major U.S. industrial hubs, auto factories, and battery makers.
Can serve EV, grid storage, and data center battery clients with minimal transport costs.
Qualifies for U.S. tax credits, subsidies, and IRA incentives.

📊 Why It’s Interesting for Small Investors

Lithium is now essential for AI infrastructure — not just EVs.
Smackover is:
- One of the most advanced brine lithium projects in the U.S.
- Supported by government funding AND major private capital.
- Environmentally better than many other lithium projects.
This is a real project, not a concept — and it's backed by a Fortune 100 energy partner (Equinor).

⚠️ What to Watch

Final Investment Decision (FID) still pending (target: late 2025)
Lithium price fluctuations could affect economics
Execution risk (construction, permitting, scaling)
Potential for equity dilution if more capital is needed

✅ Bottom Line

Smackover Lithium is shaping up to be a flagship U.S. lithium project, positioned at the intersection of:

EV boom
Grid storage revolution
AI-powered energy demand

Backed by Equinor, a $225M DOE grant, and over $1B in financing interest, this project may soon become a major domestic lithium supplier.

🔋 Lithium isn’t just for EVs anymore — it’s powering the AI era. Smackover might be one of the first North American projects to meet that demand.

Saturday, November 8, 2025

Update on Smackover Lithium - Standard Lithium/Equinor JV, racing toward Commercial development!

"lithium is no longer just an EV story. It’s becoming an AI story. A big one"!

Luke Lango - Investor Place

There have been several recent and material developments at Standard Lithium Ltd. (SLI) and its JV Smackover Lithium since our last report. Here’s a summary of the most important ones, and how they may impact your investment thesis.

✅ Key Developments

Definitive Feasibility Study (DFS) Filed for SWA Project
Smackover Lithium (the SLI‑Equinor JV) filed the DFS for its South West Arkansas project (SWA Project). Standard Lithium+2
- This is a major de‑risking milestone: the DFS is the technical & economic study required before a final investment decision (FID).
- Having set this milestone, the project moves closer to commercialization and a potential production decision.
Maiden Inferred Resource Reported for East Texas (Franklin Project)
The JV reported a maiden inferred resource for the Franklin County “Franklin Project” in East Texas, which stands within the broader Smackover Formation. Standard Lithium
- This bolsters the resource base, expanding SLI/Smackover’s footprint beyond Arkansas.
- Adds optionality: more upside potential from East Texas beyond the core SWA asset.
$130 Million Underwritten Public Offering
Standard Lithium priced an underwritten public equity offering of US$130 million to raise capital. Stock Titan+1
- Net proceeds are earmarked to fund capital expenditures at the SWA Project and the Franklin Project in East Texas.
- This addresses funding risk—one of the bear‑case issues for early‑stage lithium projects.
Regulatory/Integration Approval in Arkansas
Smackover Lithium received key regulatory approval/integration from the Arkansas Oil & Gas Commission (AOGC) for the SWA Project. Standard Lithium+1
- This is important for permitting and project execution.
- It signals the asset is moving from conceptual to execution phase.

📝 Implications & Interpretation

Advancing from “blue‑sky” toward “near‑commercial”: With a DFS filed and regulatory approvals in hand, the project is progressing from exploration/development into pre‑construction and commercial readiness.
Resource expansion creates optionality: The addition of East Texas resources adds geographic and project diversification and may enhance long‑term scalability.
Funding risk mitigated: The capital raise of US$130 m provides improved financial runway to meet early capex needs. This reduces dilution risk and execution uncertainty.
Permitting risk being addressed: Regulatory approvals in Arkansas are a positive signal in a jurisdiction known for oil/gas but now pivoting to lithium — local expertise exists; however, lithium projects still have new sets of regulatory/water/permit considerations.

⚠️ Risks Still to Monitor

Final Investment Decision (FID) timing: Even with a DFS filed, the actual FID (i.e., committing to build) may still be some time off and subject to market, commodity price, technology/cost assumptions.
Scale‑up execution risk: Although SLI has proven DLE technology, full commercial scaling always entails risk — cost overruns, delays, operational teething.
Lithium price / macro risk: The financing raise helps, but the economics still depend on lithium market pricing, supply/demand dynamics, and input cost inflation.
Dilution risk remains: Although the offering improves funding, future phases may still require further capital or joint‑venture commitments, which can dilute equity holders.

🔍 Investment Thesis Update

Given these developments, our earlier thesis is strengthened:

The project is less speculative than before — key milestones are being achieved.
The JV model (SLI/Equinor) continues to look structurally sound.
The resource base and capital structure improve the odds of commercial success.
This reinforces the view of SLI + Equinor as a leveraged play on U.S.‑based lithium brine extraction and critical‑minerals sovereignty.

Here is a timeline of major milestones for Smackover Lithium (the JV between Standard Lithium Ltd. and Equinor ASA), covering past achievements, current status and upcoming items with estimated risk‑adjusted probabilities.

📅 Key Milestones

Date	Milestone	Details	Estimated Probability
2017‑2018	Entry into Smackover Formation leases & early DLE development	Standard Lithium secured brine rights and began development in the Smackover Formation (Arkansas & Texas). Standard Lithium+2SEDAR++2	100% (already achieved)
May 2024	Formation of Smackover Lithium JV (SLI + Equinor)	JV with 55% SLI / 45% Equinor ownership established to develop SWA (Arkansas) and East Texas projects. Standard Lithium+1	100%
March 11 2025	DLE Field‑Pilot De‑Risking Completed	Field pilot at SWA site achieved >99% lithium recovery, processed brines, large‑volume test. SEDAR+	95%
April – August 2025	Regulatory Approval – Brine Production Unit	Arkansas Oil & Gas Commission (“AOGC”) unanimously approved Reynolds Brine Unit in SWA (20,854 acres) for Phase I. Smackover Lithium+1	90%
Q3 2025	Release of DFS (Definitive Feasibility Study) for SWA Project	On September 3, 2025, the JV announced DFS results: 22,500 tpa Li₂CO₃ first phase; NPV US$1.7 billion; IRR ~20.2%. Standard Lithium	100%
Q3/Q4 2025	Maiden Inferred Resource for East Texas (Franklin Project)	On September 24, 2025 the JV released inferred resource: 2,159 kt LCE, grades up to 806 mg/L lithium in brine. Investing News Network (INN)	100%
End 2025 (Target)	Final Investment Decision (FID) for Phase 1 SWA	The company is targeting an FID for SWA Phase 1 around year‑end 2025. Standard Lithium+1	~70%
2026‑2027 (Estimate)	Construction Start for SWA Phase 1	Subject to FID, construction expected to begin ~2026. Standard Lithium+1	~60%
2028 (Estimate)	First Commercial Production (SWA Phase 1)	According to DFS, first production of ~22,500 tpa battery‑quality Li₂CO₃ expected in 2028. Standard Lithium	~50%

🧭 Interpretation of Timeline & Milestones

Many of the key de‑risking steps (resource definition, DLE pilot plant, regulatory approval, DFS) have already been completed—this materially strengthens the development profile.
The next critical milestone is the Final Investment Decision (FID). Until FID is taken, project execution remains subject to financing, permitting, market conditions and EV/lithium pricing dynamics.
Construction start and commercial production are still forward‑looking and carry higher risk—delays, cost inflation and supply‐chain issues are possible.
The East Texas inferred resource adds significant optionality—this means the scale of the project could increase beyond the SWA baseline.
Regulatory and government support (e.g., DOE grant, U.S. critical minerals policy) further improve the odds of execution.

✅ What This Means for our Investment Thesis

With many early stage milestones behind them, the project moves from speculative to pre‑commercial stage, which aligns well with our thesis of “small‑cap developer becomes major JV partner asset”.
The quality of the resource (high lithium in brine grades) and technology (DLE) reduce extraction risk and improve cost competitiveness.
If the FID is taken around end 2025, the project becomes execution ready, which should trigger re‑rating by the market (assuming lithium prices and EV demand remain favorable).
The timeline suggests key events for your portfolio monitoring: FID announcement, construction start, offtake contracts, financing deals. These are the “triggers” that could move SLI/EQNR share prices.

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