xciting things are happening on Alaska’s North Slope, spearheaded by a new player on the oil and gas scene, Alyeschem. The company is currently developing a distributed chemical manufacturing facility to provide essential chemicals, starting with methanol, ultra-low sulfur diesel, nitrogen, and chemical blending services.

This will be the first petrochemical facility in the US Arctic. The North Slope’s enormous resources, paired with the extreme logistics chains required to keep everything operational, created the opportunity for this advantageous project. The facility will help monetize stranded North Slope natural gas and reduce fuel imports up the Dalton Highway.

Alyeschem develops chemical manufacturing solutions to meet the unique needs of the Arctic. Founded by Alaskans, Alyeschem is committed to sustainable development and long-term partnership with Alaska-based investors, local communities, government entities, and industry partners.

The principal demand for chemicals is driven by oil and gas production activities on the North Slope, which is home to six of the largest US oil fields. Methanol and ultra-low sulfur diesel are essential in the operations of all these fields, as well as for Alyeska Pipeline Service Company, the operator of the Trans Alaska Pipeline System. Methanol has been used consistently in Alaska oil fields for more than four decades.

“Methanol is one of the most commonly used commodity chemicals in the world. On the North Slope in particular, it is used for freeze protection applications along with numerous other industries,” says Alyeschem CEO JR Wilcox. “Methanol is increasingly considered as a potential replacement for hydrocarbons in marine shipping. Additionally, it is found in products such as paint and building materials. Historically, methanol was used as racing fuel, and there are records of its use in ancient Egyptian embalming practices.”

Also known as wood alcohol, its toxicity compared to other fuels and chemicals, such as gasoline, is lower. “Over a century ago, processes were developed to produce methanol from natural gas by converting it into synthesis gas. That became the foundation of the modern petrochemical industry,” explains Wilcox. “This conversion involves steam methane reformers, a technology still widely used today. The process consists of turning natural gas into synthesis gas, followed by passing the synthesis gas through reactors to produce methanol and water. Afterward, the chemical facility separates methanol from water; methanol is sold, and the water is reintroduced into the system since both are used as ingredients, alongside natural gas and the contained CO2.”

In a story of one process leading to another beneficial project, methanol production yields a surplus of hydrogen, which can then be purified and utilized. On the North Slope, this hydrogen can be used to improve diesel fuel quality. Historically, heating fuel produced on the North Slope was used as diesel until 2011, when US Environmental Protection Agency regulations changed, requiring diesel to be ultra-low sulfur. At that point, the sulfur content in heating fuel exceeded allowable levels for engine use, though it remained suitable for heating or non-combustion purposes.

Thus, “Another section of the chemical manufacturing facility will focus on hydrodesulfurization utilizing excess purified hydrogen to convert Arctic heating fuel into ultra-low sulfur diesel,” explains Wilcox. “This enables local production of engine-grade fuel at facilities like Kuparuk and Prudhoe Bay, where topping units will be able to provide this cleaned diesel fuel as a service.”

The Alaska Industrial Development and Export Authority (AIDEA) announced a strategic investment in July to provide project loan financing up to $70 million in support of the $140 million development. Alyeschem’s project is anticipated to generate more than $5 million annually in tax and royalty revenue for the state of Alaska and the North Slope Borough. Through its financing agreement with Alyeschem, AIDEA expects to receive a minimum of $2.39 million annually from loan repayment and royalties.

In addition to the financial benefits of the project, the facility’s local production of methanol and diesel is expected to reduce reliance on imported fuels, cut transportation costs, and enhance the resilience of the Trans Alaska Pipeline System.

“The primary advantage is that we can redirect lower-value bulk commodity transport away from our main haul roads and trucking resources. This approach allows us to reserve those limited assets—such as drivers and road capacity—for transporting materials that contribute directly to project development, construction, and ongoing operations,” says Wilcox. “It is likely more efficient for the state if bulk liquid transport is managed by local traffic wherever possible.”

The project offers significant advantages in terms of employment opportunities for Alaskans. During the construction phase, about eighty jobs are expected to be generated. When the facility begins operations, fifteen permanent operational jobs are projected, and Alyeschem pledges to recruit Alaskan residents and promote sustained workforce development in the Arctic region.

Alyeschem also predicts environmental benefits from its petrochemical plant. The facility is expected to eliminate an estimated 4,000 truck trips annually, reducing road wear and emissions across the region. Projections indicate CO2 emissions will be reduced by 93 percent—approximately 45,000 tons per year—compared to current supply methods.

Before any of those gains can be realized, Alyeschem must build a methanol and ultra-low sulfur diesel plant, along with associated infrastructure, including a pipeline connection to the Prudhoe Bay Unit field fuel gas system.

A previously abandoned project to truck liquefied natural gas to Fairbanks left a vacant 14-acre pad and a permitted pipeline right-of-way to intertie with the Prudhoe Bay Unit’s field fuel gas system. This provided an unexpected opportunity for Alyeschem to save years of permitting and development work.

Alyeschem purchased the pad and subsequently transferred ownership of about 10 acres to Hilcorp subsidiary Harvest Alaska. The parties have also agreed to allow construction of a common gas-supply pipeline and other measures to develop the site cooperatively.

Sharing the space doesn’t just save Alyeschem time in the permitting and development phase of the project; it also supports Harvest Alaska’s plan for bringing North Slope gas to Fairbanks. “We are very happy to be in a position to help support the plan to bring North Slope gas to heat Fairbanks homes,” says Wilcox, who was born in Fairbanks. “The synergies of our operations made sense, and thanks to the governor’s emphasis on attracting investment and our energy security, we see great opportunities ahead, adding value to Alaska’s natural resources for in-state use.”

The existing gravel pad requires further site work, including driving pile and building a tank farm. A fabrication plant in Texas is currently building truckable modules that will be assembled on the North Slope as the structure of the chemical manufacturing facility.

This modular facility can output thousands of gallons per day of methanol, and cutting out the cost of transporting the chemical to the North Slope makes the Alyeschem facility more economically viable.

“There are a considerable number of benefits to this project when we think about the future of the North Slope, which has a significant impact on the overall economic health of the state,” says Wilcox. “We have a world-class energy resource up there, and I think that’s going to be there for a long time in the future. So it comes down to a few basic questions: how do we bring down operating costs, how do we maximize the resource potential, and how do we monetize that resource potential?”

It turns out chemistry is a fundamental key tool in addressing all of those questions. The highly anticipated project spearheaded by Alyeschem is expected to help make the North Slope more independent. “In the future, we can continue to evaluate the hub of innovation we have up there and use it as a sort of footprint that can be expanded and tweaked to make other products as we see energy transition over the 21st century,” explains Wilcox. “It will be beneficial to have a chemical plant in place that can do those sorts of things.”

Alyeschem is still in active negotiations with customers and suppliers to determine exactly how everything will be coordinated over the next couple of years. But the excitement is palpable.

Wilcox says, “It is exciting to see North Slope natural gas being utilized to produce goods that are essential for the region. This represents a significant advancement towards economic self-sufficiency, delivering benefits to all Alaskans.”