Alyeschem breaks ground on North Slope methanol plant

Alyeschem held a groundbreaking ceremony May 15 for the first petrochemical facility in the U.S. Arctic. The plant will convert natural gas into methanol, a chemical used in plastics, fuels, and industrial solvents.

The facility sits on an existing Alaska Industrial Development and Export Authority gravel pad at Prudhoe Bay. It will blend North Slope natural gas with waste carbon dioxide to produce methanol. The methanol will then be used to create hydrogen, which removes sulfur from diesel fuel produced on the North Slope.

The process turns a greenhouse gas into a marketable product. Methanol currently reaches the North Slope by ship to the West Coast, then by truck up the Dalton Highway. The plant will eliminate that supply chain.

The technology

The facility uses a catalytic reaction to combine methane and carbon dioxide under heat and pressure. The result is methanol and water. A second process splits methanol into hydrogen and carbon monoxide. The hydrogen then strips sulfur from diesel, producing ultra-low sulfur diesel that meets federal clean fuel standards.

The plant will process stranded natural gas that currently has no commercial outlet. North Slope operators flare or reinject gas that cannot move through existing pipelines.

The backers

AIDEA approved up to $70 million in financing for the project in May 2024 through Resolution G24-04. The financing is structured as a royalty on each gallon produced. AIDEA expects to earn at least $2.39 million annually from the arrangement.

McKinley Alaska Private Investment and BP Energy Partners provided equity investment. Alyeschem secured a gas supply contract and completed front-end engineering and design before breaking ground.

AIDEA developed the gravel pad years earlier as part of its North Slope infrastructure program. The program creates pre-permitted sites to support industrial projects and minimize new surface disturbance on the Arctic coastal plain.

Jobs and revenue

The project is expected to support approximately 80 construction jobs and 15 operations jobs. Up to 150 total jobs will be generated across the broader development effort, according to AIDEA's May 21 announcement of the ceremony.

The North Slope Borough passed a resolution supporting the project in June 2024. The facility is estimated to generate $5 million in annual tax revenue for the state and boroughs.

Alyeschem estimates the plant will reduce carbon dioxide emissions by 45,000 tons annually compared with current supply chains. The facility is projected to remove 4,000 truck trips annually from the Dalton Highway.