E3 Lithium (TSXV: ETMC) and Imperial Oil (TSX: IMO) are tightening ties to advance a pilot plant in Canada’s oil patch, where they are working together to test a direct lithium extraction (DLE) technology.
The two companies, which first announced their collaboration in 2022, have agreed to expand the scope of the Clearwater project, owned by E3. The companies hope to be able to extract naturally occurring lithium from oilfield brines at the property.
The Calgary-based lithium junior has also agreed to extend the expiry date of the warrants granted to Imperial Oil, a unit of ExxonMobil, by an additional 12 months, which can now be exercised until July 8, 2025. Imperial initially invested $6.4 million in E3 in 2022.
“This continued collaboration between E3 Lithium and Imperial is reaffirmed today given our shared vision to establish sustainable lithium production in Canada,” the company’s president and CEO, Chris Doornbos, said in a statement.
The agreement update comes amid a changing attitude among the world’s oil heavyweights. Traditionally, oil drillers have disposed of the brine by pumping it back into the ground.
The increasing demand for lithium from electric vehicles (EVs) manufacturers, paired with the U.S. and Canada’s initiatives to secure domestic battery metal supplies, have transformed this once-waste brine into a valuable resource.
Top oil reaching for lithium
Oil companies are exploring these kinds of initiatives include Occidental Petroleum Corp., which said last year it would begin investing in extraction of the battery metal from brine through its subsidiary TerraLithium.
ExxonMobil is drilling its first lithium well in the Smackover formation in southern Arkansas, with first production expected in 2027.
European oil rivals BP and Shell have invested in EV charging stations as part of their energy transition strategy.
Both Saudi Arabia and the United Arab Emirates’ national oil companies are reportedly planning to obtain lithium from brine in their oilfields.
Saudi Arabian Mining Company (Ma’aden), the Gulf’s largest miner, is already working to extract lithium from seawater.
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