VOLUME 2 | ISSUE 2 | SPRING 2025 SLOPE PETROCHEMICAL FACILITY MOVES AHEAD
Alyeschem's vision for methanol, ULS diesel production take shape BY TIM BRADNER AN ALASKA-BASED COMPANY WILL BUILD A $140 MILLION PETROCHEMICAL PLANT AT PRUDHOE BAY ON THE NORTH SLOPE TO MANU- FACTURE METHANOL AND AID IN THE PRODUC- TION OF ULTRA-LOW SULFUR (ULS) DIESEL. Anchorage-based Alyeschem LLC plans to have the facility under construc- tion next year and to be producing meth- anol and ULS diesel in 2027, according to JR Wilcox, the company’s CEO. Private equity investors will fund half of the capital cost with the remainder fi- nanced by the Alaska Industrial Develop- ment and Export Authority (AIDEA), the state’s development finance corporation, Wilcox said. Methanol is used by producing com- panies for freeze protection of producing wells and other purposes. It is now trucked to the North Slope from Southcentral Alaska along with the ULS diesel. When in operation, the plant will have the capacity to produce 32,500 gallons of methanol per day, enough to supply all current needs by producers, as well as 1,500 barrels per day of ULS diesel, which will supply part of the need for the fuel in trucks, Wilcox said. This will reduce truck traffic on the Dalton Highway, a state road linking the North Slope with Interior Alaska high- ways. The highway is heavily used to sup- port new fields being developed on the Slope, and maintenance has been a chal- lenge in recent years, so any reduction in traffic is being welcomed by state transpor- tation officials. Wilcox said the plant will not totally produce the ULS diesel, but that by us- ing hydrogen available from the methanol process, it will upgrade high-sulfur diesel
Photo Courtesy Alyeschem LLC
now produced in small topping plants on the Slope to remove sulfur and meet the U.S. Environmental Protection Agency’s standard of 15 ppm sulfur standard for ULS diesel. Once the plant is in operation, Aly- eschem will explore other products that can be marketed to producers such as di- methyl ether (DEM) for Enhanced Oil Recovery in large viscous and heavy oil deposits in the North Slope field areas, Wilcox said. Companies have worked for years ex- ploring ways of using large stranded nat- ural gas deposits on the North Slope to make liquid products that can be used in the region or exported off the Slope. A lot of work has been done including by ExxonMobil on a plant using the Fischer– Tropsch process, but the scale of the plant and complexity of the process have made it uneconomic. A Fischer–Tropsch plant could make gasoline, diesel and other products. Exx- onMobil’s studies focused on a large plant on the Slope that would transport products through the Trans-Alaska Pipeline System,
which now moves crude oil but has ample available capacity. Wilcox pursued an alternative plan of demonstrating that liquids manufacture from gas on the North Slope, a high-cost region, can be done by initially targeting a niche product like methanol and then expanding the plant as other products are developed. In a related development, a new plant to produce liquefied natural gas, or LNG, is nearing completion on the North Slope and is being built on the same 15-acre pad with the Alyeschem plant. The LNG plant is being built by Harvest Alaska, an affiliate of Hilcorp Energy, a North Slope producer. The Harvest and Alyeschem plants will share certain facilities, such as a 1,000-foot 8-inch pipeline bringing natural gas from a nearby oil processing plant along with certain utilities. Harvest will supply LNG to a gas utility in Fairbanks, in Interior Alaska, the Interi- or Gas Utility (IGU). LNG will be trucked from the North Slope to IGU in Fairbanks for storage and for local gas distribution.
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ALASKA RESOURCE REVIEW SPRING 2025
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