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Lithium Project Expands in Arkansas, With Murphy Oil Keeping Watch

4 min read

While Standard Lithium Ltd. of Canada examines expanding its reach for brine to filter for lithium extraction in South Arkansas, Murphy Oil Corp. is noting that it also has brine fields near El Dorado, but no active plans to exploit them for supplying the growing lithium ion battery market.

In a news release this week, Standard Lithium of Vancouver, British Columbia, said it was crunching numbers on possible brine leases involving Tetra Technologies in Columbia and Lafayette counties.

A preliminary economic assessment will weigh the possibility of an integrated project including brine wells, pipelines and a lithium extraction plant using proprietary technology it has proven over months at a test plant in El Dorado.

That plant is tied into the infrastructure of Lanxess, the German multinational chemical company. The potential project with Tetra Technologies would also include a plant to convert the lithium chloride derived from the brine into lithium hydroxide. That compound is used in the production of cathode materials for lithium ion batteries.

Murphy Oil CEO Roger Jenkins addressed lithium’s prospects on the oil drilling giant’s South Arkansas lands publicly for the first time in a conference call with investors and analysts after Murphy reported its first-quarter results two weeks ago. (Murphy, founded in El Dorado, moved its corporate headquarters from Arkansas to Houston last year.)

Answering a question from analyst Stephen Richardson of Evercore ISI, who noted Murphy’s long legacy in Arkansas and remaining mineral rights in the state, Jenkins replied that Murphy has no concrete plans for lithium, at least for now, but he alluded to Standard Lithium’s project.

“We do have about 10,000 acres of royalty lands in Union County, Arkansas, the home of the founding Murphy family,” Jenkins said. “We do have royalty income from brine. We are closely monitoring the extraction of the brine for lithium. There’s …  a project, a big large-scale extraction project, that we’re monitoring. And we are not today working to add in that region, but we … have long-term knowledge about that particular situation.”

Pressed by Richardson on whether Murphy sees long-term possibilities in the lithium market, Jenkins hedged and then cut the subject short, saying Murphy will review different opportunities as the world’s shift away from fossil fuels continues. 

“Naturally being part of that [lithium extraction] would allow us to have more focus and information around that particular item,” Jenkins said. “And I’d rather just leave it at that today, Steve, if you don’t mind.”

Standard Lithium has hired Vancouver’s NORAM Engineering and Constructors Ltd. as lead consultant in its assessment of expansion plan. NORAM will guide a multidisciplinary team in preparing and coordinating the economic assessment. Hunt Guillot & Associates LLC of Ruston, Louisiana, will weigh in on specifics like brine supply, injection well and pipeline design, and construction costs.

The plan was first reported by magnoliareporter.com.

Hundreds of thousands of tons of lithium carbonate equivalent were estimated based on tests on Tetra Technologies Inc. property in the Smackover Formation, a Jurassic limestone aquifer that is the source of brine that already feeds south Arkansas’ bromine industry. Standard Lithium uses tail brine from Lanxess’ bromine processing to mine lithium at its test plant in El Dorado.

The Tetra brine is in an area of current oil and gas production, and is adjacent to Albemarle Corp.’s producing brine leases generally north and south of U.S. 371 west of Magnolia, running into eastern Lafayette County. The economic assessment is expected to be finished in July or August, Standard officials said, adding that the 27,262 net acres of brine leases have been sampled, with strong lithium resources discovered.

The grounds have “significant existing infrastructure,” with roads, power lines, pipelines, water and rail, and more than 2,000 wells deep enough to reach into the Smackover Formation, the company said.

“We continue to evaluate and accelerate our lithium brine project development activities in Southern Arkansas,” said Andy Robinson, Standard’s chief operating officer. “The Tetra project is a very high-quality resource with excellent lithium grades, reservoir characteristics and existing infrastructure.
“This work will continue Standard Lithium’s mission of combining technological improvements with the highest-quality lithium brine assets to deliver the next generation of sustainable lithium products in North America.”

Company literature says Standard has agreements with regional independent oil and gas producers with open, unused Smackover Formation wells in the new lease area and nearby, and it is gathering new lithium brine samples from key brine production zones.

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