The Alaska Industrial Development and Export Authority has finalized loan agreements providing up to $70 million in project financing for a groundbreaking energy facility on the North Slope, to be built by Alyeschem LLC.
The facility will be the first of its kind in Alaska, producing methanol and ultra-low sulfur diesel from stranded natural gas and waste carbon dioxide.
The project, part of Alyeschem’s Distributed Chemical Manufacturing platform, is designed to turn previously untapped resources into essential fuels and chemicals for oilfield operations. Methanol is a critical fluid used to prevent pipeline corrosion and freezing and producing it locally will reduce dependence on imported fuels and bolster the resilience of the Trans-Alaska Pipeline System.
“This facility is an Alaskan solution to long-standing logistical challenges, which will allow us to replace key fluids currently imported to the North Slope with locally made methanol and clean diesel,” said I.R. Wilcox, CEO of Alyeschem. He emphasized the project’s long-term role in sustaining the North Slope’s energy economy and adapting to global market demands.
The hydrogen generated in the process will be used to refine high-sulfur diesel into ultra-low sulfur diesel, improving fuel quality and cutting emissions for oilfield operations. Alyeschem plans to expand production in the future to include dimethyl ether and chemicals used in enhanced oil recovery.
Construction will take place on a previously developed AIDEA gravel pad, minimizing environmental impact. With permits secured and front-end engineering completed, Alyeschem is preparing to break ground. The location was selected to serve oilfield operations directly, reducing long-haul transport needs and logistical bottlenecks.
The facility is projected to eliminate approximately 4,000 truck trips annually, significantly reducing emissions and road wear across the region. It is also expected to cut CO₂ emissions by an estimated 93%—about 45,000 tons per year—compared to current fuel delivery methods.
Backed by strong support from Gov. Mike Dunleavy, the North Slope Borough, and state leaders, the project is anticipated to generate over $5 million annually in tax and royalty revenues for the state and borough. AIDEA expects to receive at least $2.39 million annually in loan repayments and royalties.
“This is exactly the kind of project AIDEA was created to support,” said AIDEA Executive Director Randy Ruaro. “It unlocks the economic value of stranded gas, creates jobs, and strengthens Alaska’s energy infrastructure for decades to come.”
AIDEA Board Chairman Dana Pruhs echoed that sentiment, saying, “This Alaskan project meets AIDEA’s mission by creating Alaskan jobs and providing an economic return to Alaskans for generations.”
Construction is expected to create around 80 jobs, with 15 permanent positions once the facility is operational. Alyeschem has committed to hiring Alaskans and supporting long-term employment in the Arctic.
Geoff Johns, AIDEA’s Chief Financial Officer, called the project a high-impact investment: “Alyeschem’s facility not only generates strong returns for public funds but also catalyzes private capital and innovation in Alaska’s energy sector.”
With this strategic investment, Alaska takes a bold step toward transforming its stranded natural gas into an engine for clean fuel, economic development, and energy resilience.
This sounds like a truly great project. Wondering if there is another shoe, not yet on the floor.
How about the loss of hundreds of jobs associated with transporting fuel to the slope. Sure sounds like another win for the oil companies though.
Tell me you ain’t know nothing about the amount of things that need shipped up to the field with out telling me. That’s the other shoe… That reduction in trips won’t happen it’ll just be for other things
Liberals will be screaming, leave the fossil fuels in the ground or we will all die. Yet, they won’t have any problem spending the revenue it will produce.
Oh great. Now we’re all going to die yet again. And what’s left after ADF&G let’s all the wolves and bears gorge on the caribou will be gone too.
I think that building the facility might be a fine idea.. but not with state loans. If they can’t attract industry investment dollars, maybe there is a good reason.
Wonder why the big oil companies haven’t come up with this idea before with all of their engineering expertise? Perhaps it wasn’t economical. It certainly isn’t new. Back as far as 2012 it has been studied (even earlier? I don’t have that much dedication to look further on Google). Hope they can make it work economically beyond this 70,000,000 dollar loan. Time will tell.
See: ‘https://www.uwyo.edu/govcom/_files/docs/reports/2012/ACTTF%20Feasibility%20Minerals%20to%20Value-Added%20Products%20WRI%20Report.pdf
I have to agree with AK Fish on this. A cool project but 30+ years to payback makes me suspicious. I too hope they can make it work and be economically feasible but the initial numbers don’t seem to support that.
And we should not have built the FedX hanger and we should not have built the red dog road. Hell people let’s not do anything and see what happens. AIDEA was designed with oil money to help finance projects. It actually has been very successful. I hate nay sayers. Can’t get there from here people. Guess who is the customer for the product produced. The oil companies do not need to own everything.
Sounds good!
I’m waiting for the giant data center to be built up there where cooling is cheep and energy sources abundant…
Hydrocarbons in the winter; solar, wind, and hydrocarbons in the summer.
Methanol isn’t fuel. It’s used for things like freeze proofing wells. Congrats to JR! One of the best bosses I ever had in the oil patch.
This is a prime example of the State of Alaska blowing millions of the peoples’ PFD money on a project that will purely support private industry and spending OUR money where PRIVATE money should be spent. If the oil companies don’t want to pay to build it, then it is a non economical expenditure. Period.
It’s a LOAN. Nothing is getting blown.
Until it’s forgiven by oily legislators.
Economics much? It’ll eventually make its way back into the PFD with interest and a long-term profit.
It’s much better to spend our PFD on schools that can’t seem to educate our children!
At one point Arco had a small diesel plant in Prudhue bay. It produced fuel for local contractors as well as themselves. Between the greenies and the irs they got it shut down. Now we are TRUCKING gas and diesel back 600 miles to where it originated. On the worst road in North America. You would think there would be enough brains from people complaining here to figure out this project is a safer and much more efficient way to do things.
Next you whiners will want the airline companies to build airports and auto makers to pay for roads. The money for all government owned infrastructure comes for taxes, a lot of which is paid for by the industries that will benefit from those expenditures. In this case the money is a loan to a company so they can build the facility. The facility will be run by a profit oriented company which I think is preferable to being run by a government agency. Considering the amount of money government tends to waste, I have no problem with the State of Alaska loaning Alyeschem this money. Hopefully it will result in long term good paying jobs for our residents.