Smackover Lithium Signs 10-Year Lithium Offtake With LG Energy Solution
Drilling at the South West Arkansas Project, which targets 22,500 tonnes a year of battery-quality lithium carbonate in its initial phase. Photo Credit: Standard Lithium
Key Points
- Smackover Lithium, the partnership between Standard Lithium and Equinor, announced a binding take-or-pay offtake agreement with LG Energy Solution on August 31, 2026.
- LG Energy Solution will buy 8,000 metric tonnes a year of battery-quality lithium carbonate for 10 years, starting when the South West Arkansas Project reaches commercial production.
- With the Trafigura contract signed in March, roughly 90% of the project’s targeted offtake volume is now committed. The partners are seeking contracts covering about 80% of the 22,500 tonne nameplate capacity of the initial phase.
- Pricing and other key commercial terms are confidential, structured to support the anticipated project financing. Due diligence by the three export credit agencies is well underway.
- Smackover Lithium has indications of interest for more than $1 billion of project debt from three export credit agencies and is targeting a final investment decision in 2026, with first production planned for 2029.
The Agreement
Smackover Lithium, a partnership between Standard Lithium Ltd (NYSE American: SLI, TSXV: SLI) and Equinor, each acting through subsidiaries, has signed its second commercial offtake agreement. Standard Lithium describes the customer, LG Energy Solution, as a leading global manufacturer of lithium-ion batteries for applications including energy storage systems and electric vehicles.
The contract is binding and take-or-pay. It covers 8,000 metric tonnes a year of battery-quality lithium carbonate over 10 years, with deliveries starting once the South West Arkansas Project begins commercial production. Pricing and other key commercial terms are subject to confidentiality, and Smackover Lithium says they are structured to support anticipated financing for the project.
Take-or-Pay Offtake
A supply contract under which the buyer pays for an agreed volume whether or not it takes delivery. Smackover Lithium says the customer offtake process is being run in conjunction with the project financing process and is critical to supporting the contemplated debt size, duration and structure.
— David Park, Chief Executive Officer, Standard Lithium“The Agreement further anchors our customer offtake portfolio, complementing the contract with Trafigura we announced in March of this year, and is another major milestone in the development of the SWA Project. We have now secured a vast majority of the offtake agreements needed to move forward with our Project financing plans and a Final Investment Decision.”
The Offtake Book
Smackover Lithium is not selling the whole plant forward. The partners are targeting offtake agreements covering roughly 80% of the 22,500 tonnes of annual nameplate lithium carbonate capacity in the initial phase, which works out at about 18,000 tonnes a year. The two contracts signed so far account for 16,000 tonnes of that, or roughly 90% of the targeted volume.
| Counterparty | Volume | Term | Announced |
|---|---|---|---|
| Trafigura | 8,000 t/yr | 10 years | March 9, 2026 |
| LG Energy Solution | 8,000 t/yr | 10 years | August 31, 2026 |
Trafigura is a commodity trading company; LG Energy Solution is a battery manufacturer, which puts the second contract with an end user of the material.
The partnership says it remains in advanced discussions with several prospective customers and aims to conclude the offtake process shortly, with the expectation of signing one additional smaller agreement.
— Kang Yeol Lee, Procurement Center Leader, LG Energy Solution“We are pleased to begin this partnership with Smackover Lithium and the Agreement marks another step toward establishing a solid and resilient supply chain that keeps our products competitive in key strategic markets. By bringing both battery production and sourcing to the U.S., we will deliver competitive and sustainable products to our customers driving the global energy storage and EV markets.”
The South West Arkansas Project
Standard Lithium owns 55% of the Smackover Lithium projects and operates them. Equinor holds the remaining 45% through subsidiaries. The partnership was formed in May 2024 and is developing multiple direct lithium extraction projects in southwest Arkansas and east Texas. South West Arkansas is a greenfield project in southern Arkansas on the Smackover Formation, which Standard Lithium describes as an attractive lithium brine asset and the location of its flagship projects.
The production route is direct lithium extraction, which Standard Lithium pairs with purification in what it describes as a scalable and fully integrated process. The initial phase is designed for 22,500 tonnes a year of battery-quality lithium carbonate, and first commercial production is planned for 2029, with construction to begin promptly after the investment decision.
Direct Lithium Extraction (DLE)
A group of processes that separate lithium from brine using sorbents, ion exchange or solvent extraction, rather than concentrating it in large evaporation ponds. Standard Lithium’s stated approach is a fully integrated DLE and purification process producing battery-quality lithium carbonate.
The release also carries an acknowledgement that the work is supported by the US Department of Energy’s Office of Critical Minerals and Energy Innovation.
Financing and the Investment Decision
The customer offtake process is being run in conjunction with the SWA Project financing process, and Smackover Lithium says it is critical to supporting the contemplated debt size, duration and structure. In a financing update on December 9, 2025, the partnership highlighted indications of interest for over $1 billion in project debt from three major export credit agencies. Due diligence and other customary processes by those ECAs in furtherance of the project financing are well underway.
Smackover Lithium is targeting a final investment decision this year, with construction planned to begin promptly after it and first commercial production of battery-quality lithium carbonate in 2029. Deliveries under both offtake agreements run from that point.
Roughly 2,000 tonnes a year of the targeted volume remains uncommitted on the figures above. The release does not state the size of the additional agreement the partnership expects to sign.
What It Means for Standard Lithium
Standard Lithium describes itself as a near-commercial lithium development company, and the SWA Project is not scheduled to reach first commercial production until 2029. Its market capitalization was approximately $629 million as of August 29, 2026. With a final investment decision targeted this year and first production planned for 2029, the offtake book is one input into the financing the partnership is assembling.
LG Energy Solution framed the agreement in terms of supply chain resilience, calling it a step toward a supply chain that keeps its products competitive in key strategic markets, and tying that to bringing both battery production and sourcing to the United States. Park described the material as US-based and sustainably produced battery-quality lithium carbonate.
Standard Lithium appears in the Green Stocks Research Lithium Stocks list as a US development-stage lithium developer working oilfield brine with direct lithium extraction.
References
- Standard Lithium Ltd, “Smackover Lithium Signs Binding Customer Offtake with LG Energy Solution for the South West Arkansas Project,” Press Release, August 31, 2026.
- Standard Lithium Ltd, “Smackover Lithium Signs First Binding Customer Offtake Agreement for the South West Arkansas Project,” Press Release, March 9, 2026.
- Trafigura, “Trafigura signs battery-grade lithium carbonate offtake agreement with Smackover Lithium,” Press Release, March 9, 2026.
- Standard Lithium Ltd, Exhibit 99.1 to Form 6-K, SEC Filing, August 31, 2026.
- LG Energy Solution, “LG Energy Solution Secures Multi-Year Supply of U.S.-Produced Lithium Carbonate from Smackover Lithium,” Press Release, August 31, 2026.