Imperial Oil signs deal with E3 Lithium to advance pilot project in Alberta’s historic Leduc oilfield

Imperial Oil logo at the company's annual meeting in Calgary on April 28, 2017. Imperial Oil Ltd. has signed a deal with E3 Lithium for a lithium project in Alberta and agreed to invest $6.35 million in the company. THE CANADIAN PRESS/Jeff McIntosh. JMC

Imperial Oil Ltd. has signed a deal to help advance a lithium project in Alberta’s historic Leduc oilfield.

The agreement will see Imperial invest $6.35 million in E3 Lithium, a Calgary-based junior resource company that has developed a technology to extract the naturally occurring lithium — a light metal that is a key component in the batteries used in electric vehicles — from oilfield brines.

Imperial has also agreed to provide technical and development support for E3’s Clearwater project, which includes drilling lithium evaluation wells and developing a field pilot project before moving onto the commercialization stage.

The Leduc oilfield was the site of Leduc No. 1, the historic gusher struck by Imperial in 1947 that launched Alberta’s oil and gas industry and changed the course of the province’s economy. It has also long been known as the site of one of Canada’s largest lithium resources, though there was little interest in developing a lithium industry in Alberta until the recent growth of electric vehicles and an exponential rise in demand for lithium ion batteries.

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Click to play video: 'From lithium to hydrogen: How Alberta hopes to power the new energy future'
From lithium to hydrogen: How Alberta hopes to power the new energy future

Having a giant like Imperial working with his company in exploring the redevelopment of Leduc into a world-class source of lithium is an “exciting new chapter,” E3 chief executive Chris Doornbos said in an interview.

“This is Imperial coming back into this aquifer and looking at it from a lithium perspective. For us, that’s huge, because it demonstrates their belief in this aquifer,” Doornbos said. “They know, probably better than any other company out there, how it can produce as a resource.”

Under the agreement, E3 will remain the operator of the Clearwater project but receive support from Imperial in areas such as water and reservoir management. The agreement also includes access for E3 to freehold lands in the area, which are operated by Imperial.

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Drilling on the first of three evaluation wells, the first lithium wells ever drilled in Alberta, will begin immediately, Doornbos said. Work will also focus on scaling up E3’s proprietary technology, which brings the brine to the surface where the lithium is removed and concentrated and then returns the liquid underground as part of a closed-loop system.

Canada has identified lithium as a focus of its $3.8-billion, eight-year critical minerals strategy. The aim is to increase extraction and production of Canadian lithium, as well as cobalt, copper, titanium, zinc and other minerals that are used as components in electric vehicles and their batteries.

The goal is to create a domestic supply chain for electric vehicles, and in doing so, boost the economy while tackling greenhouse gas emissions at the same time.

In the federal budget in April, the government announced a new 30 per cent tax credit for exploration projects related to critical minerals such as lithium.

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