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NESR Expands Into Lithium Extraction With New Saudi Aramco Deal
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Key Takeaways
NESR signs a $200 million Saudi Aramco lithium extraction deal, with a contract term of up to five years.
The project targets 2,000 tpa of battery-grade lithium carbonate, with production planned for late 2027.
NESR's LiThara platform integrates brine treatment, direct lithium extraction and carbonation technologies.
National Energy Services Reunited Corp. (NESR - Free Report) , an oilfield services firm, has signed an agreement with Saudi Aramco to proceed with the Aramco 2027 Lithium Demonstration Project. The project reflects Saudi Arabia's intent to develop lithium production capabilities and expand beyond conventional oilfield services. The contract is worth about $200 million and can run for up to five years. The work associated with it will be executed through NESR's Environmental and Decarbonization Applications (NEDA) business segment.
The oilfield services company has highlighted that this project is a first-of-its-kind initiative and targets approximately 2,000 tons per annum (tpa) of battery-grade lithium carbonate production. NESR noted that this is a turnkey project, meaning that the company will handle all the necessary work within the scope of the contract and deliver a complete, ready-for-use asset to its client. Commissioning activities and the start of production are expected in late 2027.
The agreement brings together Saudi Aramco’s extensive subsurface knowledge and expertise with NEDA’s technology portfolio, which includes lithium extraction and processing solutions under the LiThara technology platform. The integrated setup includes pre-treatment of brine to remove impurities that may interfere with lithium extraction, direct lithium extraction and carbonation technology to convert the extracted lithium into lithium carbonate that meets battery-grade requirements. NESR emphasized that the LiThara platform uses modular solutions to condition the brine and extract lithium in a streamlined process, designed for swift deployment and can be scaled up as per requirements.
New Growth Avenues for NESR’s Technology Portfolio
In its latest earnings call, NESR mentioned that it has been investing in its technology portfolio and pilot projects for several years, particularly NEDA and ROYA. The Aramco contract is an opportunity for the company to demonstrate NEDA’s technological capabilities, specifically the LiThara technology, and to expand its service offerings beyond conventional oilfield services and participate in energy transition projects. NESR is a leading oilfield services provider operating in the Middle East and North Africa region. The project leverages its experience in subsurface activities and field operations in Saudi Arabia.
Lithium is a key raw material used in renewable energy storage and in batteries for electric vehicles (EVs). The increasing focus on renewable energy and growing adoption of EVs is expected to increase the demand for lithium-based batteries. As such, developing domestic lithium extraction capabilities in the Kingdom can support the development of its battery supply chain and reduce reliance on imported raw materials.
PBF Energy has a geographically diverse refining network with large-scale processing capacity and a highly complex refining system. It operates six refineries, including Delaware City Refinery, Paulsboro Refinery, Toledo Refinery, Chalmette Refinery, Torrance Refinery and Martinez Refinery, with a combined throughput capacity of 1 million barrels per day and the ability to process a wide range of feedstocks. The diversified refining footprint provides the company exposure to several regional refining markets, supporting higher margins.
Valero Energy is a leading refining player with a robust network of 14 refineries and a combined high-complexity throughput capacity of 3 million barrels per day, which distinguishes it from other independent refiners. VLO’s refineries have a combined Nelson Complexity Index of 11.5, which implies that the refineries can process a wide variety of feedstocks, convert them into higher-value products and shift product yields according to market conditions.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. This discovery allows Galp to diversify its global presence with the potential to become a significant oil producer in the region. It refines and markets oil products and gas, as well as engages in marketing and sales activities.
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NESR Expands Into Lithium Extraction With New Saudi Aramco Deal
Key Takeaways
National Energy Services Reunited Corp. (NESR - Free Report) , an oilfield services firm, has signed an agreement with Saudi Aramco to proceed with the Aramco 2027 Lithium Demonstration Project. The project reflects Saudi Arabia's intent to develop lithium production capabilities and expand beyond conventional oilfield services. The contract is worth about $200 million and can run for up to five years. The work associated with it will be executed through NESR's Environmental and Decarbonization Applications (NEDA) business segment.
The oilfield services company has highlighted that this project is a first-of-its-kind initiative and targets approximately 2,000 tons per annum (tpa) of battery-grade lithium carbonate production. NESR noted that this is a turnkey project, meaning that the company will handle all the necessary work within the scope of the contract and deliver a complete, ready-for-use asset to its client. Commissioning activities and the start of production are expected in late 2027.
NESR's LiThara Platform Supports Lithium Extraction
The agreement brings together Saudi Aramco’s extensive subsurface knowledge and expertise with NEDA’s technology portfolio, which includes lithium extraction and processing solutions under the LiThara technology platform. The integrated setup includes pre-treatment of brine to remove impurities that may interfere with lithium extraction, direct lithium extraction and carbonation technology to convert the extracted lithium into lithium carbonate that meets battery-grade requirements. NESR emphasized that the LiThara platform uses modular solutions to condition the brine and extract lithium in a streamlined process, designed for swift deployment and can be scaled up as per requirements.
New Growth Avenues for NESR’s Technology Portfolio
In its latest earnings call, NESR mentioned that it has been investing in its technology portfolio and pilot projects for several years, particularly NEDA and ROYA. The Aramco contract is an opportunity for the company to demonstrate NEDA’s technological capabilities, specifically the LiThara technology, and to expand its service offerings beyond conventional oilfield services and participate in energy transition projects. NESR is a leading oilfield services provider operating in the Middle East and North Africa region. The project leverages its experience in subsurface activities and field operations in Saudi Arabia.
Lithium is a key raw material used in renewable energy storage and in batteries for electric vehicles (EVs). The increasing focus on renewable energy and growing adoption of EVs is expected to increase the demand for lithium-based batteries. As such, developing domestic lithium extraction capabilities in the Kingdom can support the development of its battery supply chain and reduce reliance on imported raw materials.
NESR’s Zacks Rank & Key Picks
NESR currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the energy sector are PBF Energy (PBF - Free Report) , Valero Energy (VLO - Free Report) and Galp Energia SGPS SA (GLPEY - Free Report) . While PBF Energy and Valero sport a Zacks Rank #1 (Strong Buy) each, Galp Energia carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
PBF Energy has a geographically diverse refining network with large-scale processing capacity and a highly complex refining system. It operates six refineries, including Delaware City Refinery, Paulsboro Refinery, Toledo Refinery, Chalmette Refinery, Torrance Refinery and Martinez Refinery, with a combined throughput capacity of 1 million barrels per day and the ability to process a wide range of feedstocks. The diversified refining footprint provides the company exposure to several regional refining markets, supporting higher margins.
Valero Energy is a leading refining player with a robust network of 14 refineries and a combined high-complexity throughput capacity of 3 million barrels per day, which distinguishes it from other independent refiners. VLO’s refineries have a combined Nelson Complexity Index of 11.5, which implies that the refineries can process a wide variety of feedstocks, convert them into higher-value products and shift product yields according to market conditions.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. This discovery allows Galp to diversify its global presence with the potential to become a significant oil producer in the region. It refines and markets oil products and gas, as well as engages in marketing and sales activities.