Southwest Arkansas lithium project moves toward FID with 10-year offtake deal

Smackover Lithium, a joint venture between Standard Lithium Ltd. and Equinor, through subsidiaries of Equinor ASA, signed the first commercial offtake agreement for the South West Arkansas Project (SWA Project) with commodities group Trafigura Trading LLC.

Under the terms of a binding take-or-pay offtake agreement, the JV will supply Trafigura with 8,000 metric tonnes/year (tpy) of battery-quality lithium carbonate (Li₂CO₃₎ over a 10-year period, beginning at the start of commercial production.

Smackover Lithium is expected to achieve final investment decision (FID) for the project, which aims to use direct lithium extraction technology to produce lithium from brine resources in the Smackover formation in southern Arkansas, in 2026, with first production anticipated in 2028.

The project encompasses about 30,000 acres of brine leases in the region, with the initial phase of project development focused on production from the 20,854-acre Reynolds Brine Unit.  

Front-end engineering design was completed in support of a definitive feasibility study with a principal recommendation that the project is ready to progress to FID. 

While pricing terms of the Trafigura deal were kept confidential, Standard Lithium said they are “structured to support the anticipated financing for the project.”

The JV is seeking to finalize customer offtake agreements for roughly 80% of the 22,500 tonnes of annual nameplate lithium carbonate capacity for the initial phase of the project. This agreement represents over 40% of the targeted offtake commitments.

Formed in 2024, Smackover Lithium is developing multiple DLE projects in Southwest Arkansas and East Texas. Standard Lithium is operator of the projecs with 55% interest. Equinor holds the remaining 45% interest.