New York — MGX Minerals is developing the world's first commercial petrolithium wastewater facility, kickstarting a potential new revenue source for the oil and natural gas industry, according to the company's CEO.
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Petrolithium is the extraction of lithium from associated water, or brine, from oil and gas operations. MGX's new PurLucid system filters lithium out of brines and cuts in half water treatment costs, down to $7/b of water from $15/b in places like the Athabasca Oil Sands and Pennsylvania, Jared Lazerson said in an interview Thursday
"Lithium is today where natural gas used to be a century ago as an associated waste product from oil production," Lazerson said. "You can get oil, gas and minerals from the wellhead, and companies understand this."
MGX earns $1/b by extracting lithium from wastewater with lithium concentrations over 200 ppm like at the Marcellus Shale, Lazerson said. While salt brines in Chile and Argentina have lithium concentrations greater than 1,200-1,000 ppm, Petrolithium's advantage over them is that it can immediately recover the metal versus the 18- to 24-month evaporation extraction process the South American production faces, he said.
Canadian independent Connacher Oil & Gas received regulatory approval to build MGX's first commercial facility wastewater operation, a 1,500 b/d PurLucid facility at its Great Divide project near Fort McMurray, Alberta, Lazerson said. Connacher has two SAGD operations at Great Divide, which produced about 10,000 b/d in 2017, and it is expected to ramp up to 20,000 b/d going forward, it has said.
SAGD wastewater is highly toxic, requiring it be trucked at high cost to a treatment facility, Lazerson said. MGX's PurLucid system is a modular, on-site and low-cost solution to handle wastewater, while creating a new revenue stream, he said.
According to S&P Global Platts Analytics, water treatment typically accounts for 5%-10% of an upstream project's cost, going up to 70% in some cases like older mature fields. Today, North America produces over 70 million b/d of associated brine from wells, according to MGX.
PurLucid's currently has a breakeven cost at 100 ppm of lithium, but Lazerson expects the technology will mature in the years to come, improving its economics and its capacity to process low lithium concentrations.
"It doesn't make any sense right now just to extract the lithium; the water treatment is what will drive lithium production at lower ppm," Lazerson said. The revenues that can now be made on lithium extraction is marginal, but this will grow along the use of electric vehicles, he added.
The development of petrolithium use will go through a process similar to historical establishment of the gas industry, Lazarson said.
"People are trying to figure out how to take advantage of these resources," he added. Oil and gas operators will eventually see lithium concentrations in associated brine water as a potential additional revenue source, he said.
"This is one of these crazy ironies of nature, Lazerson said. "Big oil companies produce a large lithium feedstock. The same companies that in the 1980s tried to kill the electric car. In the future, there are no reasons why the oil industry couldn't be a large supplier of lithium." -- Daniel Rodriguez, firstname.lastname@example.org
-- Edited by Richard Rubin, email@example.com